COSCO SHIPPING Specialized Carriers launches Shanghai – Persian Gulf Liner Service

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COSCO SHIPPING Specialized Carriers

On November 26, the vessel M.V. YU HENG XIAN FENG –  operated by Guangzhou Yuanhai Car Carrier Transportation Co., Ltd., a joint venture under COSCO SHIPPING Specialized Carriers – was working diligently at the Shanghai Haitong International Auto Terminal located in Waigaoqiao, Pudong New Area, Shanghai. Loaded with 3,859 cars of Chinese brands, including FAW, SAIC, Chery, JAC, Dongfeng, Geely and GWM, the vessel will depart for the Persian Gulf in the Middle East and is expected to arrive at the Port of Jebel Ali and Port of Dammam in the Persian Gulf in approximately 17 days, marking the official opening of liner service between Shanghai and the Persian Gulf by Guangzhou Yuanhai Car Carrier Transportation.

Today, finished automobiles for export are transported mainly by ship. However, according to statistics, the sales volume of Chinese brand cars in Saudi Arabia, the United Arab Emirates, and other Middle East countries in 2021 reached nearly 200,000. In 2022, sales continued to maintain stable growth and hit about 150,000 during the year’s first half, indicating that auto exports to the Middle East market have registered explosive growth. As a result, the contradiction between the supply and demand of shipping capacity on the Persian Gulf route is increasingly prominent.

To meet the demand of auto exporters, the company has invested the capacity of three 5,000-slot PCTCs previously operating on the South America line into the near-ocean Persian Gulf line, providing liner transportation service twice a month, which can double the limited capacity efficiency. As a result, the new arrangement is more conducive for Chinese auto manufacturers to develop their sales, production, logistics, and delivery plans. In addition, it can increase the existing shipping capacity while better guaranteeing the safety and stability of China’s auto industrial chain and supply chain.

China FAW Group Import & Export Co., Ltd. (FAW Import & Export) is a wholly owned subsidiary of China FAW Group engaged in the import and export trade. According to FAW’s overseas business development plan, the demand for shipping capacity of PCTCs on the Persian Gulf, Red Sea, Europe, Africa, and Latin America lines will continue to multiply in the next three to five years, said Zhang Guangfu, Director of International Trade Service Department of FAW Import & Export.

The launch of the Persian Gulf liner service has accelerated the integrated development of global production, transportation and marketing of Chinese automobiles and provided a strong guarantee of international transportation services for Chinese automobile brands to go global with high quality.

Previously on November 24, FAW Import & Export and Guangzhou Yuanhai Car Carrier Transportation signed a three-year (2022-2025) COA agreement.

China’s auto exports have ushered in rapid growth since 2021, with export volume reaching 2.015 million in 2021, up 101.1% year-over-year. The latest data shows that from January to October this year, China exported 2.456 million finished vehicles, up 54.1% year-over-year, while the annual export is expected to approach 3 million. However, as a critical link in China’s auto export, international transportation is currently confronted with the urgent problem of insufficient shipping capacity, unstable capacity supply, and inadequate sharing of logistics information.

To alleviate the shortage of PCTC shipping capacity in the Chinese market, Guangzhou Yuanhai Car Carrier Transportation has launched a new shipbuilding plan and will put more than 15 7,000-8,600-slot large LNG dual-fuel PCTCs into service from the second half of 2024. With the delivery of new capacity, the company will gradually expand its route coverage to Europe, South America, the Red Sea, Mexico, Australia, and other regions. In addition, it will also work together with various parties to provide comprehensive logistics supply chain solutions involving containers, special liners for collapsible car frames and those for machinery vehicles for China’s auto exports.

Guangzhou Yuanhai Car Carrier Transportation is a third-party auto logistics supply chain company jointly funded by COSCO SHIPPING Specialized Carriers, Shanghai International Port Group Logistics (SIPGL) and SAIC Anji Logistics, which provides supply chain logistics services for China’s auto exports as a common carrier for international transportation by PCTCs.

As early as 2005, M.V. FU QUAN KOU, a vessel operated by the predecessor of COSCO SHIPPING Specialized Carriers, launched the first international shipping route from China to the Persian Gulf at the Haitong Terminal in Waigaoqiao, Shanghai, to deliver China-produced automobiles to the Middle East. After 17 years, COSCO SHIPPING returned to the route to provide liner service for Chinese commercial vehicles exported to the Middle East. Compared with the previous effort, the scale of shipping capacity invested this time is larger. The long-term sustainable and stable operation of this liner service will bring valuable new opportunities and new momentum for Chinese car enterprises to go global.

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Ryan is the Digital Marketing and Content Creation Manager for Trade and Logistics Siam Ltd. He provides a creative flair to the team and his resourcefulness helps to bring an imaginative improvement to both literary archetypes and online content production. A writer by day and a rider by night, when he's not composing the latest logistics news update or creating compelling copy for our clients, Ryan spends his free time travelling Thailand by motorbike.