6 vessels, 3.5 billion yuan! COSCO SHIPPING Special Transport's first batch of car carrier orders finalized

COSCO SHIPPING Special Transport, a leading domestic automobile foreign trade transportation company, has officially finalized its first order for car carriers. It will cooperate with China Merchants Bank Financial Leasing to order six 7,500-vehicle LNG-powered car carriers from Xiamen Shipbuilding Heavy Industry.

According to TradeWinds, CMB Financial Leasing has signed a contract with Xiamen Shipbuilding Heavy Industry for the construction of six 7,500-vehicle LNG-powered car carriers. Each vessel costs approximately US$86 million, with a total value of US$516 million (approximately RMB 3.482 billion) for all six. COSCO SHIPPING Special Transport will sign a long-term charter contract with CMB Financial Leasing to lease these new vessels; the specific lease term and rent have not been disclosed.

The order for these six new vessels is part of COSCO SHIPPING Special Transport's fleet expansion plan. Earlier this year, news emerged that COSCO SHIPPING Special Transport would order car carriers; reports at the time indicated that the company would order at least 15 new vessels, expanding its fleet from the current five to 20. To this end, it has contacted almost all shipyards in China that have built car carriers, including Nanjing Jinling and Weihai Jinling Shipyards (subsidiaries of China Merchants Industry), Jiangnan Shipyard, Xiamen Shipbuilding Heavy Industry, CIMC Raffles, New Times Shipbuilding, Guangzhou Shipyard International, and COSCO SHIPPING Heavy Industry (also under the COSCO SHIPPING Group).

Xiamen Shipbuilding Heavy Industry has extensive experience in building car carriers. As early as 2020, Xiamen Shipbuilding Heavy Industry delivered two of the world's largest LNG-powered car carriers, the "Siem Confucius" and "Siem Aristotle." These were the first LNG-powered car carriers in history capable of transatlantic voyages. These two vessels filled the gap in China's independent design and construction technology for large dual-fuel car carriers. The "Siem Confucius" also won the 2021 SHIPPAX Deep Sea Roll-on/Roll-off Environmental Award.

In addition to the six vessels from CMB Leasing at Xiamen Shipbuilding Heavy Industry, COSCO SHIPPING Special Transport is reportedly cooperating with two other Chinese financial leasing companies to order another nine 7,500-vehicle LNG-powered car carriers from Guangzhou Shipyard International and Hudong-Zhonghua Shipbuilding. Guangzhou Shipyard International will build six, and Hudong-Zhonghua Shipbuilding will build the other three. This order is also expected to be Hudong-Zhonghua Shipbuilding's first car carrier order.

It is understood that COSCO SHIPPING Special Transport is one of the earliest shipping companies in China to enter the field of professional automobile transportation. In 2003, it established a joint venture with NYK Line to operate car carriers, namely COSCO NYK Car Carrier Transportation Co., Ltd. After the establishment of the COSCO SHIPPING Group, COSCO SHIPPING Special Transport invested in and established the new group's only professional roll-on/roll-off transportation platform in December 2016—Guangzhou COSCO SHIPPING Roll-on/Roll-off Transportation Co., Ltd. The new company integrated the car carrier businesses of the former COSCO and COSCO (China) groups, significantly improving its overall strength and becoming the largest professional car carrier company in China.

According to official website information, COSCO SHIPPING Special Transport's car carrier fleet currently has five car carriers with a total capacity of 24,132 vehicles, including three vessels with a total capacity of 15,932 vehicles operating on foreign trade routes. This scale firmly places it at the top of domestic automobile foreign trade transportation. However, the five car carriers of COSCO SHIPPING Special Transport are all over 10 years old and urgently need fleet renewal.

In addition to the need for fleet renewal, the sharp increase in domestic automobile exports has also prompted COSCO SHIPPING Special Transport to expand its fleet through large-scale ship ordering. Official data shows that in 2021, China exported 2.015 million vehicles, a year-on-year increase of 100%, exceeding 2 million for the first time and breaking through the long-standing level of around 1 million vehicles. The China Association of Automobile Manufacturers predicts that China's automobile exports will enter a period of rapid growth, with an expected increase of about 22% in 2022.

On the morning of July 11, COSCO SHIPPING Special Transport and FAW Car Import and Export Co., Ltd. signed a strategic cooperation agreement. Both sides stated that they would take the signing of the strategic cooperation agreement as an opportunity, adhering to the principles of "mutual benefit, long-term cooperation, and common development." They will continuously enhance mutual trust and cooperation, strengthen complementary advantages, continuously deepen cooperation in the field of international shipping, and jointly promote the continuous improvement of both sides' competitiveness and brand influence in the international market.

For COSCO SHIPPING Special Transport, CMB Financial Leasing is a familiar partner. Last month, COSCO SHIPPING Special Transport just signed an operating lease project for a total of 12 70,000-ton multipurpose pulp carriers with three financial leasing companies, totaling US$74,022,000, including five from CMB Leasing, two from Bank of Shanghai Leasing, and five from ICBC Leasing. These 12 pulp carriers were all built by Dalian COSCO SHIPPING Heavy Industry. COSCO SHIPPING Special Transport will operate them under an operating lease for 15 years, with a fixed time charter rent of US$16,900 per vessel per day.

It is understood that CMB Financial Leasing is one of the first five bank-affiliated financial leasing companies approved by the state, established in 2008. As one of the leading financial leasing companies in China, CMB Financial Leasing currently ranks third in asset balance and fourth in order backlog. In 2021, its total investment in new shipbuilding exceeded 2 million gross tons. Currently, CMB Financial Leasing owns more than 200 vessels, with a vessel asset balance exceeding RMB 46 billion, a total carrying capacity exceeding 15.5 million deadweight tons. Its vessel types cover three major types of transport vessels, gas carriers, passenger vessels, and other special vessels. It has maintained long-term and good cooperative relationships with world-class shipping companies and independent ship owners.