COSCO

China Ocean Shipping Company, Limited, formerly China Ocean Shipping (Group) Company,[lower-alpha 1] commonly known for its abbreviated name COSCO Group, or simply, COSCO, is one of the major holding companies for COSCO Shipping, one of the world's largest shipping companies. COSCO Shipping was formed in January 2016 by a merger of COSCO and China Shipping Group as one conglomerate.

Not to be confused with Costco or Cusco.
For other uses, see Cosco (disambiguation).
China Ocean Shipping Company, Limited
FormerlyChina Ocean Shipping (Group) Corporation
Typesubsidiary
IndustryTransportation
FoundedApril 27, 1961 (1961-04-27)
Defunct2016
Fatebecame a subsidiary
SuccessorChina COSCO Shipping
Headquarters
Xicheng District, Beijing
,
China
Area served
Worldwide
ServicesFreight forwarding
Shipbuilding
Ship repairing
Terminal operations
Website
Chinese name
Simplified Chinese中国远洋运输有限公司
former name
Simplified Chinese中国远洋运输（集团）总公司
former short name
Simplified Chinese中远集团
COSCO Vancouver
COSCO 40 foot container
Semi-submersible heavy lift vessel Xiang Rui Kou
President of COSCO Group Capt. Wei Jiafu (left) meets with Deputy Foregin Minister of Greece, Dimitris Kourkoulas (right), 2012.

COSCO was founded in 1961 as a Chinese Government owned shipping and logistics services supplier company.[1]

COSCO headquarters is in Ocean Plaza in the Xicheng District in Beijing.[2][3] It owns 1114 ships, including 365 dry bulk vessels, a container fleet with a capacity of 1,580,000 twenty-foot equivalent units (TEU), and a tanker fleet of 120 vessels.[4] The fleet calls at over a thousand ports worldwide.[5] It ranks among the largest in both number of container ships and aggregate container volume in the world.[6] In 2012, it was among China's top 15 brands.[7]

It was the largest dry bulk carrier in China and one of the largest dry bulk shipping operators worldwide. In addition, the Group is the largest liner carrier in China.[8]

History

China Ocean Shipping Company (1961–1993)

China Ocean Shipping Company, or COSCO in short, was founded in 1961 as a Chinese government agency. In the same year, a subsidiary was formed in Guangzhou, Guangdong Province. The Guangzhou subsidiary purchased a British vessel and renamed it as Guanghua (Chinese: 光华). Guanghua made its maiden voyage to Jakarta for the People's Republic of China in April 1961.[9]

After the US resumed diplomatic relations with China in the 1970s, China Ocean Shipping Company signed an agreement with American company Lykes Brothers Steamship Company in 1979. The agreement opens the commercial sea routes between the United States and the People's Republic of China.[10] In the same year, COSCO became the Chinese side representative to collaborate with International Telephone and Telegraph on repairing the communication facilities in the coastal cities of China.[11]

In 1981, COSCO won a contract from the Pakistani Government owned National Tanker Company of Pakistan, for crude oil transport.[12]

China Ocean Shipping (Group) Company (1993–2015)

The company became a holding company and renamed as China Ocean Shipping (Group) Company in 1993.[13] Two other government owned companies, China Marine Bunker Supply Company (Chimbusco in short) and China Road Transport Company, which engaged in oil tanker and road transport businesses respectively, became the subsidiaries of the group in 1988 and 1992[14] respectively. China Road Transport Company was renamed into COSCO Logistics in 2001 (now part of COSCO Shipping Logistics). As of 2003, COSCO Logistics engaged in shipping agency, freight forwarding, third party logistics and supporting services.[14] While Chimbusco became a joint venture with PetroChina since 2003.[15]

COSCO has a Hong Kong division which the division acquired a HK-listed company Shun Shing Holdings[lower-alpha 2] in February 1997.[16] Hong Kong was a British colony until June 30, 1997, and has been a special administrative region of China with a separate jurisdiction system since July 1. Another subsidiary of COSCO HK at that time,[16] COSCO Pacific,[lower-alpha 3] was a HK-listed company since 1994. COSCO Pacific has a joint venture with Hongkong International Terminals Limited, which operates a terminal in Kwai Tsing Container Terminals, Hong Kong since 1991.[17] COSCO Pacific acquired 49% stake of COSCO Logistics from the parent company in 2003. COSCO retained the remaining 51%.[14] COSCO Pacific also owned 20% stake of Hong Kong-based Chong Hing Bank from 1997[18] to 2007. In 2007 the stake was sold to the parent company, COSCO HK.[19][20]

In 1995, another subsidiary, COSCO Corporation (Singapore) Limited,[lower-alpha 4] became a listed company in Singapore Exchange.[21] The company was a component of Straits Times Index until 2010.[22]

COSCO also acquired a Shanghai-listed company in 1997 as a vehicle of backdoor listing. It became COSCO Development,[lower-alpha 5] which engaged in real estate. The direct parent company of COSCO Development was sold in 2005, thus COSCO Development was no longer part of the COSCO Group.[23] Also in 2005, COSCO Group acquired a company from COSCO Development.[24] That company was the operator of Boao Forum for Asia.[13]

In 2002, another subsidiary, COSCO Shipping Co., Ltd.,[lower-alpha 6] became a listed company in Shanghai.

In 2004, COSCO formed a joint venture with fellow Central Government owned Ansteel Group (Angang Group).[25]

In 2005, the flagship subsidiary of COSCO, China COSCO Holdings, became a listed company.[26] The A share of China COSCO Holdings was listed in Shanghai since 2007.[27]

Mergers

In 2005, a smaller Central Government owned company, China Ocean Shipping Tally (known as China Tally in short), was merged into COSCO Group.[28]

In 2008, China COSCO Holdings was part of Financial Times Global 500 for the first time.[29]

By 2015, after more than 5 decades, COSCO Group expanded into one of the major shipping company of the country. It also had a few listed subsidiaries: COSCO Pacific, COSCO International Holdings, China COSCO Holdings, China International Marine Containers, etc., . Real estate developer, Sino-Ocean Group, was an associate company of COSCO until 2010.

In December 2015, COSCO Group merged with fellow Chinese Government owned China Shipping Group[30] to form China COSCO Shipping. COSCO Group was retained as an intermediate holding company.

In December 2017, COSCO Group (China Ocean Shipping (Group) Company) was re-incorporated from "An industrial enterprise owned by the whole people" to simply a limited company. The name of the company, also changed to China Ocean Shipping Company, Limited (Chinese: 中国远洋运输有限公司).[31]

Subsidiaries

COSCO contains several listed companies and has more than 300 subsidiaries locally and abroad, providing services in freight forwarding, ship building, ship repair, terminal operation, container manufacturing, trade, financing, real estate, and information technology.[32]

On the eve of 2015 merger, COSCO Group has a few listed companies:[33]

  • China COSCO Holdings (SEHK: 1919; SSE: 601919) - flagship listed subsidiary, also known as "China COSCO" or "COSCO Holdings"
    • COSCO Pacific (SEHK: 1199) - port operator and investor. Significantly (43.63%) owned by China COSCO Holdings as of 31 December 2015[34]
  • COSCO International (SEHK: 517)[35]
  • COSCO Shipping Co., Ltd. (SSE:600428) - engaged in specialized carriers. COSCO owned 50.58% shares directly.[36]
  • COSCO Corporation (Singapore) (SGX:F83)
  • Cosco SHIPPING Lines (Japan)

Moreover, China International Marine Containers is an associate company of the group, which COSCO indirectly owned 22.77% shares of that listed company as of December 2015.[37] The stake was owned by COSCO Pacific until 2013.[38]

As of 2000, COSCO also owned 30% stake of China Cargo Airlines.[39]

COSCO also had an unlisted business unit in Hong Kong, which was known as COSCO (Hong Kong) Group Limited. COSCO (H.K.) Group was the direct parent company of COSCO Pacific (valid until December 2004[40][41]) and COSCO International.[35] COSCO (H.K.) Group bought the 20% stake of Chong Hing Bank and the entire stake of Shun Shing Construction from COSCO Pacific[19][20] and COSCO International[42] respectively in 2007.

Controversies

In 1991 COSCO was asked by the US Federal Maritime Commission (FMC) to submit information regarding Chinese Government restricting U.S.-flag carriers on doing business in China. However, COSCO asked FMC to drop its probe instead.[43] FMC also investigated COSCO for its pricing behavior in 1997, but stating there is not enough evidence to launch a formal probe on alleged under-pricing its service to eliminate competitor.[44]

In August 1993, COSCO's ship Yinhe, was anchored off the coast of Oman. US government alleged that the ship carried material exported to Iran, which could be used to make chemical weapons. COSCO claimed that the ship only contained "paper goods, hardware and machine parts".[45] In what became known as the Yinhe incident, United States military vessels and aircraft followed the Yinhe, disrupting its normal travel route.[46]: 69  The United States unilaterally disabled the Yinhe's civilian GPS, causing it lose direction and anchor on the high seas for twenty-four days until it agreed to inspection.[47][48] The Yinhe experienced shortages of water and fuel.[46]: 69–70  The inspection, which occurred in Saudi Arabia did not find any improper chemicals[49] and on September 4, representatives of the Chinese, Saudi and United States governments jointly signed a certification that the ship's cargo did not contain materials related to chemical weapons.[50]: 54 

In 1997, Dianne Feinstein and Barbara Boxer, United States senators from California, had asked the Clinton administration to investigate COSCO's leasing on a former naval base in Long Beach. The site was developed into a container port terminal, Pacific Container Terminal.[51] However, continued controversy and opposition by Republican lawmakers caused cancellation of the lease, and the new cargo terminal, which was in fact built by the Long Beach Harbor Department (Port of Long Beach), was leased to Hanjin Shipping, a South Korean firm.

During the 2022 Russian invasion of Ukraine, most shipping companies halted all container shipping to Russia, except for basic food products, medicine and humanitarian aid. The exception is COSCO which continues to ship to Russia, and was the largest shipping company to do so.[52]

Incidents and accidents

2009 Norway oil spill
Main article: Full City oil spill

On 31 July 2009, the Panama-flagged bulk carrier, Full City, operated by COSCO Group's HK division,[53] experienced engine failure and ran aground near Langesund, Telemark, Norway, during a storm, spilling 200 tons of heavy bunker fuel oil in an ecologically and environmentally sensitive wildlife area.[54]

See also

Footnotes
  1. Also transliterated as China Ocean Shipping (Group) Corporation
  2. After the acquisition, the listed company was known as COSCO International. As of 2020, is known as COSCO Shipping International (Hong Kong)
  3. As of 2020, the company is known as COSCO Shipping Ports
  4. As of 2020, the company is known as COSCO Shipping International (Singapore)
  5. COSCO Development and COSCO Shipping Development are not the same company. As of 2020, the listed company that formerly known as COSCO Development, is known as Shanghai Wanye Enterprises and no longer a real estate company
  6. COSCO Shipping Co., Ltd. and China COSCO Shipping are not the same company. China COSCO Shipping is the ultimate parent company of the group. After the 2015 merger, COSCO Shipping Co., Ltd. was renamed COSCO Shipping Specialized Carriers Co., Ltd.

References
general
  • Kasic, Christopher (2012). Hill, Karen (ed.). "China Ocean Shipping (Group) Company". International Directory of Company History. Gale. 128.
specific
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