Grand China plans rapid transpacific growth
Grand China Shipping, the latest shipping company to enter the transpacific trade, has plans to expand rapidly over the next 18 months.
The containership Red Strength departed Shanghai last week and is scheduled to arrive on April 26 at Total Terminals International at Pier T in Long Beach after a 12-day crossing.
The Red Strength is one of five 2,700-TEU ships in the company's SPX service that will operate in a rotation of Hong Kong, Shenzhen, Ningbo, Shanghai, Long Beach and Hong Kong.
Gary Luo, senior vice president, said the company will operate the ship without partners and has an option to call Oakland at a later time.
The company is looking to eventually split its service and add more ships so that it has two separate loops covering North and South China.
The company hopes to expand to the Pacific Northwest and start an all-water loop to the U.S. East Coast by next year and also offer intermodal service to inland points.
'This is the general direction we are going,' Luo said.
Grand China Shipping is part of Grand China Logistics Group, which manages the overall transportation and logistics business of HNA Group, a conglomerate that had revenues in 2009 of $7.9 billion. HNA, the parent of Hainan Airlines and a number of other regional carriers, also has interests in airports, hotel, tourism, retailing, finance and catering.
One of its subsidiaries, Tianjin Marine Shipping, owns 19 containerships with total capacity of 20,000 TEUs. Like Grand China Shipping, it has ambitious plans for growth, with the goal of a 250,000-TEU fleet in five years
It offers liner services between China and Japan, Korea, Taiwan, Vietnam, the Philippines, and the offshore island of Hainan.
Grand China Logistics operates 94 ships and has total assets of $6.9 billion.
In addition to container shipping it has interests in dry bulk and tanker shipping; owns cargo carrier Yangtze River Airline; operates marine terminals in Jingjang, Yangpu and Changshu; owns two shipyards; and owns three logistics companies.
Luo said that while the company wants to target beneficial cargo owners eventually, it has initially targeted non-vessel-operating common carriers. He said the company's maiden voyage was fully booked, and that the company expects to operate with high load factors.
The company expects to sell its transpacific service to many customers already using its intra-Asia or domestic services. Luo said it will have a full sales and marketing staff in the United States.
He also says he expects an industry-wide general rate increase is coming, which will benefit carriers facing rising bunker costs. ' Chris Dupin