Big expansion plans at China United Lines (CUL) are being put into reverse as mystery surrounds the fate of a top executive.
Chairman and chief executive Raymond Chen Honghui has not been heard from since June, having been detained for reasons that remain uncertain, according to Asian sources.
The Shanghai-based company has not made any official statement.
There are also question marks over the involvement of co-chief executive Lars Christiansen in the organisation.
A source said Singapore-based Christiansen is stepping down as co-chief executive, but will remain an advisor.
That would reflect plans to scale down the company’s liner activities and to possibly sell larger newbuildings it no longer needs.
CUL hired Christiansen — the former Hapag-Lloyd senior managing director for Asia — in November 2021 to aid its growth.
The company followed that up with orders for feeder newbuildings in February 2022.
These included two 7,000-teu container ships at Shanghai Waigaoqiao Shipbuilding in a deal worth about $165m
Selling biggies
Sources in Asia believe that the company has been looking to sell the larger newbuildings as they are no longer suited to its purposes.
CUL had planned to operate the vessels in the long-haul trades between Asia and Europe.
However, CUL withdrew from those trades, including Asia-Europe, in January. The company has been looking at selling the ships, they said.
“There will be interested parties, but the main obstacle is the price,” said one source.
According to Linerlytica, CUL has expanded its operated capacity rapidly from less than 4,000 teu at the beginning of 2020 to more than 90,000 teu at its peak in November 2022.
The company placed orders with CSSC Huangpu Wenchong Shipbuilding for two 2,700-teu boxships for more than $40m per ship.
It also booked four 1,900-teu vessels at Huangpu Wenchong and a pair of 2,400-teu ships at Yangzijiang Shipbuilding.
But CUL’s global expansion has gone into retreat, with the company’s global ranking slipping from 21st to 45th, according to Linerlytica.
The company withdrew its last two ships from the Asia-Med and Asia-USWC routes and has no hope of reaching its growth target, the analyst added.
And a plan to launch an IPO in Hong Kong in January 2022 has already been withdrawn, it added.
The organisation’s goal of operating a fleet of 45 ships of 160,000 teu by 2025 will not be achieved, with its current operated fleet shrinking by 67% from its peak in 2022 to just 30,700 teu currently.
Meanwhile, CUL continues to refocus away from the east-west trades and towards regional trade lanes.
The company plans to strengthen its China-India network with a service to be launched on 16 August, starting with the 4,532-teu Wan Hai 512 (built 2012).
CUL takes slots on Interasia Lines ICI service, which is jointly operated with Wan Hai Lines.
