Merger of Chinese Shipping and Cosco receives state approval
In a bid to strengthen China’s competitiveness, two of its state shipping giants will combine their container-shipping assets, as part of a multibillion-dollar merger.
China’s Cabinet approved the merger between China Ocean Shipping (Group) Co. (also known as COSCO Group) and China Shipping (Group) Co. according to statement posted on the website of China’s state-owned Assets Supervision and Administration Commission.
Cosco and China Shipping will combine their listed container-shipping operations to create the world’s fourth-biggest container-shipping line, after AP Moller Maersk Group, Mediterranean Shipping Co. and France’s CMA CGM SA.
Cosco said that in an exchange filling that it plans to consolidate the container-shipping operations with its state-backed rival China Shipping Container Lines Co. through acquiring 33 container-shipping units and affiliates from for 1.14 billion yuan and leasing its container ships.
The Hong Kong and Shanghai-listed flagship of Cosco Group plans to sell all its dry-bulk shipping businesses to its state parent for 6.77 billion yuan. China Shipping Development Co., the oil-and-bulk-shipping unit of China Shipping Group, also plans to buy the oil shipping business from China Cosco Group.
The asset restructuring also covers the two groups’ ports and oil-tanker-shipping operations. COSCOPacific Ltd., the Hong Kong-listed port-operating arm of Cosco Group will pay 7.63 billion yuan to buy the port-operating business of China Shipping (Group) Co. Cosco Pacific also plans to sell its container leasing business—Florens Container Holdings Ltd.—to a unit of China Shipping Container Lines Co. for 7.78 billion yuan.
In short, this merger will stop the two groups from competing against each other at home and abroad, at a time when the shipping industry is troubled by both oversupply and depressed freight rates.
SOURCE: [Wall Street Journal]
Elon Musk's Boring Co. planning wider tunnels for freight
Elon Musk’s drilling outfit The Boring Company could be shifting its focus towards subterranean freight and logistics solutions, according to reports.
A Boring Co. pitch deck seen and shared by Bloomberg depicts plans to construct wider tunnels designed to accommodate shipping containers.
Founded by Tesla CEO Musk in 2016, the company initially stated its mission was to offer safer, faster point-to-point transport for people, particularly in cities plagued by traffic congestion. It also planned longer tunnels to ferry passengers between popular destinations across the US.
The Boring Co. completed its first commercial project earlier this year in April. The 1.7m tunnel system is designed to move professionals between convention centres in Las Vegas using Tesla EVs. It says the Las Vegas Convention Centre Loop can cut travel time between venues from 45 minutes to just two.
Boring Co.'s new freight tunnels
The Boring Co.'s new tunnel designs would allow freight to be transported on purpose built platforms, labelled as “battery-powered freight carriers”. The document shows that, though the containers could technically fit within its current 12-foot tunnels, wider tunnels would be more efficient. Designs for a new tunnel, 21 feet in diameter, show that they can comfortably accommodate two containers side-by-side, with a one-foot gap between them.
The Boring Co.’s new drilling machine, dubbed Prufrock, can tunnel at a rate of one mile per week, which is six times faster than its previous machine, and is designed to ‘porpoise’ - mimicking the marine animal by ‘diving’ below ground and reemerging once the tunnel is complete.
Tesla’s supply chain woes
Tesla is facing its own supply chain and logistic issues. The EV manufacturer has raised the price of its vehicles, with CEO Musk confirming the incremental hike was a result of “major supply chain pressure”. Musk replied to a disgruntled Twitter user, confused as to why prices were rising while features were being removed from the cars, saying the “raw materials especially” were a big issue.
Car manufacturing continues to be one of the industries hit hardest by a global shortage in semiconductor chips. While China’s chip manufacturing levels hit an all-time high in May, and the US is proposing a 25% tax credit for chip manufacturers, demand still outstrips supply. Automakers including Volkswagen and Audi have again said they expect reduced vehicle output in the next quarter due to a lack of semiconductors, with more factory downtime likely.
Top Image credit: The Boring Company / @boringcompany