SIMIC

The move comes a year after state-controlled CULines surprised the industry by appointing former Hapag-Lloyd executive Lars Christiansen as its co-CEO alongside Raymond Chen, reports London's Loadstar.

Yang Ming and Wan Hai are both Taiwanese operators, and considering the island's often difficult diplomatic relationship with China, the appointments raised eyebrows.

Mr Chen used to oversee CULines' ship agency affiliate, Unitrans Agency, and developed contacts in the Taiwanese market, enabling the carrier to operate cross-strait services shortly after its incorporation in September 2005.

Yang Ming's focus is on long-haul routes while Wan Hai is mainly an intra-Asia carrier, and may imply that CULines hopes to expand both its ocean-going and shortsea businesses.

Xeneta chief analyst Peter Sand suggested that CULines could seek alliances with larger operators to expand its operations. Currently, it is ranked 23rd among liner operators, with capacity of 80,519 TEU on seven owned ships and 22 chartered vessels.

Mr Sand said: "Twenty-nine ships doesn't make one a global player. And with six ships on order - two of 7,000 TEU and four at 2,500 TEU - that doesn't sound like a rapidly expanding player either. In short, CULines can't do it on its own. For that to be feasible, CULines must find a partner or two to bring scale to any ambition."

Meanwhile, Antong Holdings, parent of Quanzhou Ansheng Shipping, announced last week that CULines will pay CNY470 million (US$67 million) as compensation for the early termination of their vessel-sharing agreement, which precipitated the latter's exit from the Asia-Europe trade. The amount includes $10.54 million of outstanding ship charter and profit-sharing payments.

CULines said despite its unsuccessful Asia-Europe venture, it expected to make good profits in Q3 and, after two years of historically high freight rates, the company has achieved cumulative profits of more than $430 million. This will give CULines enough capital for future development.