Chinese state-owned firm, COSCO Shipping Corporation Limited (COSCO) has gained a foothold in Hamburg, Germany’s largest seaport.
On Sep 21 it was confirmed that COSCO subsidiary, COSCO Shipping Ports Limited (CSPL), will take a 35 percent stake in Container Terminal Tollerort GmbH (CTT). Antitrust authorities have yet to approve the deal.1,2,3
HHLA, which saw volumes at its Hamburg terminals fall 7.2 percent in the first three months of 2021,4 announced in June that negotiations were underway with COSCO. HHLA hopes that additional traffic and infrastructure investment will flow from a strategic partnership with COSCO, while COSCO seek linkage effects for shipping services through the operation of its own global terminal network.5
A state champion aligned with Beijing’s maritime ambitions
COSCO is the world’s third largest container carrier measured by capacity, and the fifth largest port terminal operator in terms of throughput.6,7 It was born in its current form, through the complicated merger, in 2015-2016, of COSCO with its rival, China Shipping Group (CSG), emerging as a formidable national champion.8
COSCO’s ownership structure is a hybrid of state owned and public company. The firm’s global expansion is in line with Beijing’s interests, and its growth has been facilitated by access to state capital,9 though it can be difficult to disentangle COSCO’s political and commercial drivers.
Beijing’s declared ambition of becoming a global “maritime power”10 includes the development of China’s maritime industries and merchant navy – a strategy that is clearly in line with the interests of COSCO’s executives and shareholders.
Chinese firms control 10 percent of European shipping
There are three Chinese companies involved in European ports: COSCO, China Merchants Port Holdings Company (CMP) (招商局港口控股), which is the world’s sixth largest terminal operator, and Hutchison Port Holdings Limited (Hutchison) – a private Hong Kong group that is the world’s number two operator. Of these, COSCO is the most relevant actor – it is the only operator that is also a shipping carrier, and it is the only state-owned Chinese actor with controlling shares in European terminals.
COSCO achieved its ambition of operating its own port in Europe in 2008 when, facilitated by the global economic crisis, it gained a 35-year lease to manage piers 2 and 3 at the Athens port of Piraeus. In 2016, the Greek government sold its majority stake in the Piraeus Port Authority (PPA) to COSCO, as Greece was under pressure to repay debt to the EU and International Monetary Fund.
Although the takeover has not been without controversies, Piraeus under COSCO’s leadership has become the busiest port in the Mediterranean and the fourth busiest in Europe, up from 17th place in 2007.11