China United Lines (CULines), a state-controlled shipping company, is grappling with an uncertain future following the abrupt termination of its Asia-Mediterranean services. The company’s dreams of building a robust deep-sea shipping portfolio have been shattered, leaving stakeholders and industry experts questioning its trajectory.
CULines, initially an NVOCC (Non-Vessel Operating Common Carrier), ventured into the intra-Asia carrier market before taking a bold step into ocean-going tradelanes during the Covid-induced boom. In March 2022, the company launched Asia-North Europe services, partnering with Antong Holdings to charter ships and containers. Alongside, CULines initiated irregular Asia-Mediterranean loops, connecting key Chinese ports with Haifa, Ambarli, and Piraeus.
However, this ambitious expansion proved to be short-lived. Facing declining freight rates and reduced demand, CULines had to withdraw its Asia-North Europe services in December 2022. Consequently, the company called off its chartering agreement with Antong Holdings, incurring a significant compensation payout of $67 million. By June of the same year, CULines had to discontinue its transpacific service as well.
The challenges continued as the company’s last Asia-Mediterranean sailing took place on 15th July, with the vessel Zhong Gu Nan Hai departing from Ambarli. This move marked CULines’ complete withdrawal from long-haul routes and dashed its hopes of a stock listing.
To compound the uncertainty, Chairman and co-CEO Raymond Chen’s reported detention in China added to the company’s woes. His absence and the market’s downturn led to a drastic reduction in the fleet size – from 90,000 TEU at its peak to 30,700 TEU – a staggering 67% decrease. This decline also resulted in a drop in the liner rankings from 22nd to 36th place.
Despite these challenges, CULines still has six ships of 24,200 TEU and two of 7,000 TEU under construction, scheduled for delivery in the coming year. Nevertheless, the company must reassess its strategies and navigate the uncertain waters to regain its footing in the shipping industry.
