Wednesday, January 29, 2025

China Launches Express Container Service to Germany

Chinese containership in Germany
Service was started with the 2,495 TEU Kawa Ningbo arriving in Germany last week (State Council of Information, China)

Published Jan 28, 2025 2:06 PM by The Maritime Executive

 


The first containership in a new express service between China’s Ningbo port and Germany arrived at the terminal in Wilhelmshaven as part of an effort to build China’s maritime trade routes. The launch of the express service comes as the new Maersk-Hapag-Lloyd cooperation is also set to launch highlighting its service reliability on its first routes from Asia to Europe.

A little-known Chinese company, Zhejiang Seaport Logistics Group, is the face of the operation which has been named Kawa Shipping and the Kawa Express. Reports indicate it was conceived by officials in Shanghai and may have financial support from interests in the United Arab Emirates and Turkey. Zhejiang Seaport Logistics Group launched in 2023 offering a feeder service to the UAE.

The first vessel on the new express route was named Kawa Ningbo. Built in 2002, she is a 2,495 TEU containership that was run by Wan Hai. It was acquired by Chinese interests in July 2024 and registered in Panama. The vessel is 30,240 dwt and 656 feet (200 meters) in length.

The managing director of Kawa Shipping, Maud Lau, explained the rationale behind the new service. "Many Chinese companies, especially those in high-value sectors like automotive, lithium batteries, and solar energy require faster delivery time." The announcement refers to the service as part of China’s “Belt and Road” initiative and a commitment to “strengthening China-Europe ties.”

During the welcoming ceremonies in Wilhelmshaven on January 24, the chairman of the Zhejiang Seaport Logistics Group, Tao Chengbo, said "We are delighted to welcome the first ship of the new CEX service, the Kawa Ningbo, which started its sea voyage in Ningbo on December 30, 2024, in Wilhelmshaven on time.”

According to the Chinese what makes this new service “remarkable” is the reduced travel time between Ningbo and Wilhelmshaven. The ship is traveling the 13,800 km route (12,000 nautical miles) route in just 26 days versus the normal shipment time of 45 days for the point-to-point service. They are operating the route without intermediate stops saying the faster service will be a “game changer” for time-sensitive, high-value goods.

One advantage the Chinese have is the vessel is routing through the Red Sea and Suez Canal taking advantage of the Houthis' “safe passage” given to Chinese ships and the newly announced suspension of attack after the Gaza ceasefire. The executives pointed out during the ceremonies that many vessels are diverting taking the longer route extending travel times to 50 to 60 days.

The strategy calls for expanding the initial monthly sailings to bi-weekly in the second half of 2025. The executives said they plan to also move to a larger, 5,000 TEU vessel during the summer. They also look to add a transshipment service from Wilhelmshaven to the East Coast of the United States.

The rollout of the Chinese service comes as Maersk prepares to begin the transition to its new route system on February 1. Maersk highlights a “leaner” approach for its main line loops cutting traditional routes from seven port stops or as many as 14 to 15 stops down to just three between Asia and Germany. The new routing will be supported by dedicated shuttles with right-sized capacity for the feeder ports and moving containers to the hubs. While Maersk is not promoting it as an express service and says transit time will remain constant, it promotes the Gemini Cooperation as providing far greater service reliability and ultimately on-time schedule reliability of greater than 90 percent.

With small vessels, the Chinese service is positioned as a niche option. The United States Trade Representative recently accused China of targeting shipping services and leveraging the government for unfair competition as it seeks to dominate the shipping industry.

Beijing Struggles to Control Provinces as They Expand Distant-Water Fleet

Chinese distant-water fishing vessels in the North Pacific (USCG)
Chinese distant-water fishing vessels in the North Pacific (USCG)

Published Jan 26, 2025 12:13 PM by The Conversation

 

 

[By Hang Zhou]

Since the late 2010s, China has shown increasing sensitivity to the environmental and socioeconomic impacts of its distant-water fishing (DWF) growth, as well as the reputational harm partly inflicted by international environmental advocacy.

DWF describes countries that fish outside their own territories and extend their range of activity to the other countries’ economic exclusive zones or the high seas.

Was China’s exponential DWF growth necessarily a direct result of Beijing’s grand strategy to develop what’s known as a “blue economy” and become a maritime power? And what are the main challenges China faces if it’s going to rein in this growth?

In an article published in Marine Policy, I seek to shift the state-centric perspective on the rapid development of China’s DWF and explore the crucial role of Chinese provinces in driving this growth.

Provincial variations

Not all of China’s coastal provinces are equally interested in expanding their DWF industry. Between 2010 and 2020, Liaoning, Shandong, Zhejiang, Fujian and the China National Agricultural Development Group Co. Ltd. played a disproportionate role in boosting China’s DWF activities, as measured by the number of vessels, horsepower and fish catch.

As of 2020, these provinces collectively owned 84 per cent of China’s DWF vessels, and their combined horsepower accounted for 86.6 per cent of the total horsepower across all Chinese DWF vessels. Their catch also constituted 87 per cent of the total weight and 86.8 per cent of the total value of China’s DWF catch.

Fujian excelled as the province where fleet capacity growth yielded the highest returns in capture fisheries. It didn’t have the largest DWF fleet (Zhejiang did) or the most powerful (Shandong did). But it led in both total DWF catch volume and average catch per vessel, and was second only to Shandong in catch value per vessel.

Proactive Fujian

Although Fujian was not initially chosen as a pilot province for marine economy development in 2010, it soon formed what’s known as a leading small group, headed by the provincial governor, to reapply.

This effort succeeded in 2011, granting Fujian additional administrative and budgetary powers to develop its marine economy. Sub-provincial leading small groups were also created to enhance co-ordination and compliance across bureaucratic levels.

Once Fujian’s marine economy development gained national importance, it quickly expanded its DWF industry. In 2013, the provincial government urged efforts to forge a new era for its DWF vessels to “sail to the Western Ocean for the second time”. Local businesses seized this opportunity to seek support and gain a competitive edge over their peers from other provinces.

Starting in 2014, the provincial government promoted targeted policy incentives across the industry’s value chain: vessel renovation, access to fishing grounds, business operations and human resources. The launching of the Maritime Silk Road in 2015 with Fujian as a key participant further enabled its DWF expansion.

These measures led to a production-focused, extraction-driven DWF growth in Fujian. From 2012 to 2015, the number of Fujian’s DWF vessels and catch rose by 78 per cent and 50 per cent, significantly exceeding national targets of 15.5 per cent and 18 per cent.

Reining in growth

Since 2016, amid heightened international scrutiny, Beijing started to recentralize and tighten control over China’s DWF fleet. But this effort took time to trickle down to the provincial level. The Fujian incentive measures remained in place and were implemented until 2018 to facilitate the province’s DWF growth.

Towards the end of the 2010s, Beijing started implementing concrete centralized policies to rein in DWF growth. These included a blacklist for vessels and captains involved in illegal, unreported and unregulated (IUU) fishing, a compliance ranking for DWF companies and revisions to China’s DWF regulations.

While Fujian appeared to adhere to Beijing’s policy to limit fleet growth, it shifted efforts to secure the establishment of a national DWF base on its coast. This form of terraqueous infrastructure seeks to reorganize spaces where land and sea meet. The goal is to reduce the turnover time of DWF catch as commodities, and to maximize its commercial value.

Information-gathering challenges

Beijing’s delegation of certain administrative and fiscal power to local governments is crucial to enhancing economic performance in China’s provinces. But economic interests can motivate local governments to pursue policies that result in excessive growth and can lead to unintended foreign policy consequences for China.

Fujian’s incentive policies suggest a firm commitment to a DWF growth model focused on enhancing capacities, maximizing outputs and boosting production. These policies pay inadequate consideration to potential environmental impacts beyond its border.

A performance evaluation report on Fujian’s special subsidy fund for marine economic development praises the shift of Fujianese fishers from offshore fishing near its coast to distant-water fishing.

It says there are “social” and “environmental” benefits that include supplying more DWF professionals and easing offshore over-fishing. The report makes no reference to potential concerns over overcapacity or the ensuing environmental and foreign policy impacts.

Measures introduced by Beijing during the 13th Five-Year planning period in 2017 marked a first step towards recentralizing control and oversight over such provincial activism. But monitoring DWF poses a daunting challenge for Beijing, as its environmental footprints occur outside China and are not borne directly by Chinese citizens.

Looking ahead

China’s 2023 White Paper on DWF reaffirms efforts to improve information-gathering and monitoring on DWF fleet capacities and operations. These include establishing an inclusive DWF data collection framework and expanding the national fisheries observer program.

Although Beijing views the West as “strongly suppressing and restricting” China’s DWF, the white paper endorses dialogue with international non-governmental organizations on sustainable fisheries management and actions against IUU fishing. In other words, it acknowledges the role of international bottom-up monitoring in addressing the pervasive problem Beijing faces in gathering information on DWF.

Strengthening information-gathering and verification regarding any violations by Chinese DWF vessels of both domestic and international regulations has become critical since China replaced the DWF fuel subsidy with the international compliance capacity enhancement subsidy in 2021.

This new subsidy is partly tied to compliance scores of DWF enterprise. The Chinese Ministry of Agriculture publishes these scores annually. Any of the 14 DWF-regulated violations leads to lower scores, which in turn reduces the subsidy amount for offending enterprises.

Prompt and reliable data on IUU breaches is therefore essential to achieve the intended deterrent effect. A meaningful degree of monitoring and transparency efforts by fisheries NGOs, alongside with continued collaboration with international and regional fisheries organizations, should be encouraged and maintained by Beijing.

Hang Zhou is an Assistant Professor, Department of Political Science and Affiliated faculty member, Graduate School of International Studies at Université Laval.

This article appears courtesy of The Conversation and may be found in its original form here.

The Conversation

The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.

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