Disgruntled shippers are leaving in their droves from the company that used to be known as China Shipping Container Lines (CSCL) following its merger with Cosco earlier this year.
CSCL joined forces with Cosco Container Lines to form China Cosco Shipping this March – a move pushed by Beijing which has been aiming to get loss making state-owned enterprises to merge to become more competitive. However, in the first few months of this merger Splash understands many former CSCL customers have decided to take their business elsewhere.
One shipper told Splash: “We were never a big Cosco customer, having suffered too many unacceptable experiences over the years. We used to work a lot with China Shipping, whose service we always found impressive and responsive, but in its joint response to our tender, the new enterprise did not fare well.” He described the service levels of the new merged entity as “decidedly average, and trending down”.
“They are certainly not exactly covering themselves in glory,” the Asia-based shipper said.
Officials from China Cosco Shipping denied the company is losing clients and said the merger of the container shipping businesses is on track.
However, one consultant contacted by Splash said: “I’m aware the Chinese had lost a few clients.”
Data from Alphaliner shows that in the first two months after the merger the combined Chinese entity did drop market share by as much as 0.2%, but it has steadily clawed it back since and today China Cosco Shipping commands a 7.6% global market share, the same as the day it merged.
The most vocal critic of the merged entity, Hong Kong-based analyst Charles De Trenck told Splash: “Cosco appears to have completely mishandled CSCL staff and equipment integration. In many geographies, particularly the US, they were said to have fired and chopped former CSCL staff. There was zero planning.”
De Trenck reckoned China Cosco Shipping has seen “a large amount of business walk out the door”. The biggest hit has been on the transpacific, De Trenck maintained, a view backed up by statistics provided by Alphaliner who note the company’s weekly volumes on the transpacific slumped by 5,000 teu in the second quarter this year to 45,000 teu a week.
CSCL as a brand has since disappeared. It will now be known as Cosco Shipping Development as it switches to become a financial services platform with leasing businesses.