Cloud hangs over CULines in China as they pivot to the final long-range route

The future of China United Airlines (CULines) is uncertain after its dreams of building a deep sea cargo portfolio were dashed with the cancellation of its services in Asia and the Mediterranean.

Chairman and co-CEO Raymond Chen has reportedly been detained in China for undisclosed reasons, casting a shadow over the company, according to Linerlytica. He was last seen in public in April, at an industry roundtable event in Tianjin.

State-controlled CULines, which started as NVOCC before becoming a carrier within Asia, were among the small, opportunistic players that ventured into ocean transit during the Covid-fueled boom.

In March 2022, a year after launching Asia and Northern Europe services with charter vessels and containers from Antong Holdings, CULines started irregular loops between Asia and the Mediterranean connecting China with Haifa, Ambarli and Piraeus.

The last sailing from Asia and the Mediterranean was on July 15, when 1,912 TEU Zhong Gu Nan Hai Ambarli left. The ship is expected to be re-delivered to Zhonggu Logistics on August 15th.

CULines pulled its services in Asia and Northern Europe in December after freight rates fell rapidly amid falling demand and easing logistical bottlenecks. The carrier canceled the lease agreement with Antong, and had to pay $67 million in compensation. Then, in June, CULines discontinued her ocean service, her last sailing being by another charter vessel, the 1809 TEU. adamastus.

The company’s complete withdrawal from long-haul tracks effectively torpedoed its listing ambitions.

In February 2022, CULines filed for an initial public offering on the Hong Kong stock exchange, and plans to use the proceeds to expand its service network, targeting a fleet of 45 vessels, for 160,000 TEU, by 2025. The company has also used former Hapag – Lars Christiansen, CEO of Lloyd’s in November 2021, which raised eyebrows because it is unusual for a Chinese state-owned entity to appoint foreigners to senior positions.

However, instead, market weakness caused CULines to reduce its fleet to 30,700 TEU, 67% below its peak of 90,000 TEU last year, and accordingly moved up the carrier, which moved up the liner ranking. from 95^y spot to 22^{Abbreviation II} In March 2022, it has dropped to 36^y place.

The company has six vessels of 24,200 TEU and two of 7,000 TEU under construction, scheduled for delivery this year and next. According to Linerlytica, CULines has offered the new 7,000-TEU buildings for sale.