The future of China United Lines (CULines) is uncertain after its dreams of building a deepsea shipping portfolio have been shattered with the axing of its Asia-Mediterranean services.
Chairman and co-CEO Raymond Chen (below) has, reportedly, been detained in China for undisclosed reasons, casting a pall over the company, according to Linerlytica. He was last seen in public in April, at an industry round-table event in Tianjin.
State-controlled CULines, which started as an NVOCC before becoming an intra-Asia carrier, was among the opportunistic micro-players that ventured into ocean-going tradelanes during the Covid-fuelled boom.
In March 2022, a year after launching Asia-North Europe services with chartering ships and containers from Antong Holdings, CULines started irregular Asia-Mediterranean loops connecting China with Haifa, Ambarli and Piraeus.
CULines withdrew its Asia-North Europe services in December after freight rates rapidly declined amid falling demand and the easing of logistics bottlenecks. The carrier called off its chartering agreement with Antong, and had to pay compensation of $67m. Then, in June, CULines axed its transpacific service, its last sailing made by another chartered vessel, the 1,809 teu Adamastos.
Its final Asia-Mediterranean sailing was on 15 July, when the 1,912 teu Zhong Gu Nan Hai departed Ambarli. The vessel is expected to be redelivered to Zhonggu Logistics on 15 August.
The company’s complete withdrawal from long-haul routes has effectively torpedoed its ambitions for a stock listing.
In February 2022, CULines applied for an initial public offering on the Hong Kong Stock Exchange, planning to use the proceeds to grow its service network, targeting a fleet of 45 ships, for 160,000 teu, by 2025. The company had also employed former Hapag-Lloyd executive Lars Christiansen in November 2021, which raised eyebrows as it is unusual for a China state-owned entity to place foreigners in senior posts.
However, instead, the weakening market has caused CULines to reduce its fleet to 30,700 teu, 67% below its peak of 90,000 teu last year, Accordingly, the carrier, which climbed the liner rankings from 95th spot to 22nd in March 2022, has fallen to 36th place.
The company has six ships of 24,200 teu and two of 7,000 teu under construction, scheduled for delivery this year and next. According to Linerlytica, CULines has put the 7,000 teu newbuildings up for sale.