A shipping group and two major car companies set up a shipping company
When the high price of container transportation is going into decline, the automobile transportation market, terminals, and shipping companies have renewed their ambitions. On December 27, 2022, Anhui Hangrui International RoRo Transport Co., Ltd. with a registered capital of ¥900 million was established. The company is composed of Anhui Port and Shipping Group Co., Ltd. (44.4%), Anhui Jianghuai Automobile Group Co., Ltd. (11.11%), and Chery Automobile Co., Ltd. (44.44%) jointly hold shares. The business includes an international cargo transportation agency, international container ship, general cargo ship transportation, international ship management business, and supply chain management service. Chery Automobile is headquartered in Wuhu, Anhui. From January to November, it exported a total of 406,540 vehicles, a substantial increase of 70.9% year-on-year, accounting for 36% of the total sales volume. The booming overseas auto market may be the basis for this tripartite cooperation.
In the previous half month, the news that BYD placed an order for four 9,400 TEU ships has made everyone pay attention to the shipping industry. It is understood that the cost of each order is at least $100 million, and it is expected to be delivered successively from 2025. Afterward, the company will meet industrial and commercial changes, and its business field will add international ship management business, international ship agency, port cargo handling activities, and so on, which also means that BYD will build its own fleet to go to sea.
Car shipping has always been one of the eight traditional cargo categories at the port, but because other cargoes are containers it can obviously bring more volume and profits. However, cooperation between car companies and shipping companies has already been carried out. The throughput of the six most representative coastal terminals in the past four years in China directly shows how the industry is gradually changing from cold to hot. China has also surpassed Germany and Japan to become the world’s second-largest car exporter.
Faced with such a high export demand, car carriers are in a state of scarcity. Since automobile shipping companies generally sign long-term contracts directly with various companies, the spot market capacity is relatively scarce. According to Marine Trader, only about 40 car ships will enter the spot charter market in 2023. There are not a large number of new ships entering the market, and the rent of car ships has also risen with the surge in demand. According to Clarksons data, in October 2022, the one-year rent of 6,500 CEU car ships reached $100,000 per day, and the one-year rent of 5,000 CEU car ships has also been pushed up to $85,000 per day. BYD also previously had to use general ships to transport 40 electric trucks. Faced with the above situation, major car companies have chosen to cooperate with shipping companies to establish car shipping companies, which has become a must-choice. This means that major car companies must cooperate with shipping companies to ensure smooth export transportation on the basis of research and development, batteries, and other technologies.
History is always surprisingly similar. In the container shipping market in 2022, in order to be able to book shipping space and ship goods in a timely manner, the major shippers almost show their skills, from choosing to buy ships at the very beginning, to transporting containers by general cargo ships. In the end, the freight rate fell back. The car ship market seems to be replicating this process, from high freight rates and sky-high rents to car companies building ships. However, the unpredictability brought about by the subsequent change of the Covid-19, and the global shortage of automotive chips exceeding expectations has cast a shadow over the emerging auto market. Change is the biggest constant, and we will continue to follow up on the changes brought about by this high-speed growth of cargo to the entire industry.
