Cosco Shipping has announced that it has entered into a time charter agreement with Singapore’s Pacific International Lines (PIL) involving a total of 12 vessels from both companies. This latest deal comes at a time where speculation has been mounting about PIL being next up in Cosco’s aggressive merger drive which has seen it take on China Shipping in 2015 and recently table a $6.3bn bid for Hong Kong liner OOCL.
Under the agreement announced today, Cosco Shipping will lease one 6,500 teu containership and five 4,250 teu containerships from PIL and charter six 5,500 teu containerships to PIL. Total value of the charter transactions is around RMB123m ($18.8m).
The chartering period of the vessels ranges from seven to 10 months.
According to Cosco Shipping, the ships chartered from PIL may resolve the difficulties faced by the company due to a lack of suitable internal shipping capacity of specific ship types to satisfy the company’s new routes to the southwest of the United States, New Zealand, Africa and India. In the meantime, by leasing surplus vessels to PIL, the company’s vessels will be properly deployed, the state-run Chinese conglomerate said in a release.
PIL, run by the Teo family, has forged close ties with Cosco over the years. In July, Alphaliner tipped PIL as the next candidate in the container shipping’s current consolidation wave with Cosco presumed to be the most likely buyer.