China’s logistics service provider, Antong Holding says the company has received notice from CULines, for termination joint operation of foreign trading service due to the slump in the global container shipping market.
Earlier this year, Antong and CULines inked cooperation agreement to jointly operate foreign trading shipping service between 1 June 2022 and 31 March 2025.
“We have gained good economic benefits at early stage of our cooperation, however, due to the changes of international situation and sharp drop of international shipping market, the co-operated European and American services cannot maintain normal operation,” according to CULines. To reduce both side losses, CULines is proposing to end the cooperation ahead of time.
According to Antong, the two parties are still under negotiation and have not reached agreement.
CULines was one of number of new players that expanded into the long hual container trades on the back of the unprecedented boom in boxshipping during the pandemic. New services launched often used expensive chartered in tonnage.
The spot market for container shipping has plunged 77% since height a year ago according to analysts Drewry particularly impacting smaller, newer entrants that do have long-term contracts with customers.
“Termination of the cooperation may reduce the company’s income from foreign trading logistics sector, but will not bring substantial impact to the company’s main business engaged in domestic market,” said Antong.