COSCO SHIPPING Lines (România): Connecting cargo flows from Central Asia to Central and Eastern Europe via Constanţa Port

The maritime transport industry represents the backbone of global trade, considering 90% of all goods are transported on seas and oceans. The development of port and shipping lines, as well as the entry on the market of new services and maritime connections are the key points of globalization and modern trade. And within this context, the shipping industry represents a very accurate instrument for predicting the health level of global and regional economies.

Cătălin Petre, Deputy General Manager at COSCO SHIPPING Lines (România), discussed, in an interview for Intermodal&Logistics Magazine, the future of the regional shipping industry, trends and factors that influence the development of this sector in Romania and what these factors say about the country’s economy, digitalization in the shipping industry, but also about part of the development plans of the company for Romania.

In the first six months of 2019 COSCO SHIPPING Lines (România) recorded a 6% increase of transported volumes (in TEU), compared with the same period of the previous year, despite an increase in Romania’s commercial deficit in 2019.

Intermodal & Logistics: How do you see the future of the shipping industry at a regional and global level?

Cătălin Petre: Both on a regional and on a global scale, we will see a decrease of the number of shipping lines. If in 2013 in the container business there were around 20 shipping lines, where now this number is considerably lower, at about half and I believe that in the next few years we will see important changes – some lines, especially regional ones, will disappear or they will be acquired by global transporters, because they won’t be able to face the competition. In the not-to-distant future, only 3-5 players will remain on the market.

Intermodal & Logistics: What are the factors that influence the development of the shipping industry in Romania?

Cătălin Petre: There are numerous factors and, unfortunately, they influence the sector in a negative way, starting with the global economic policies, strategic commercial decisions, and workforce policies.

At a local level, the shipping industry, in general, is affected by the trend of manufacturing companies present in Romania (in the vast majority multinational companies or with foreign capital) to move the decision factors from Romania to regional offices.

Another trend impacting the industry is to organize annual or bi-annual tenders to purchase shipping services in order to get a global image of the offer on the market and to reduce transport costs. These decisions are impacting the shipping lines and their ability to provide competitive transport services, which in the end help grow Constanta Port. Without competitive services, manufacturing companies will often choose to ship their goods through other ports in Europe.

I would also mention other factors that have a negative impact on our industry. For instance, the decline in the construction sector in the Middle East meant a decrease in the export of construction materials, such as heavy equipment, metallic structures, wood panels and timber.

Intermodal & Logistics: Digitizing services in the shipping industry is a current topic. COSCO SHIPPING already has an online platform where clients are able to track the position of containers or to request rates for different services. How do you see this trend evolving in the future?

Cătălin Petre: Our e-business platform comes with different functionalities and is used by our clients more and more. Through this platform, they can access the Vessel Schedule to view timetables for multiple ships. If they wish to know the location of their cargo and when it will arrive, they can check these pieces of information using the Cargo Tracking facility or they can subscribe to the automatic email notification service. Moreover, the platform offers a series of other functionalities, such as online booking, issuing and printing transport documents (Bill of Landing), requesting rates, technical details (such as types of containers, shipping routes).

Personally, I believe that, although you can’t take the human factor out of transport and logistics, because it plays an extremely important role, we see the customer’s need to simplify some of the processes, for instance fast identification of transport rates. This being said, more companies will start using online platforms for this type of information.

Intermodal & Logistics: Starting January 1st 2020, IMO2020 comes into effect, the directive to reduce sulfur from liquid fuels. What will the impact of this measure be for the shipping industry?

Cătălin Petre: The costs shippers will definitely rise and, with this, the cost for maritime transport will also increase, which, in my opinion, will lead to a narrower difference between maritime and rail freight transport. Maritime transport will continue to be cheaper than rail, but the difference between the two will be significantly lower. In this context, it’s possible that part of the cargo transported on sea will shift towards rail, travel time being shorter in the case of railway transport, especially if we talk about the One Belt, One Road initiative, where there are already several trains in transit on the two corridors (Northern and Middle Corridors), with increasing cargo volumes.

Intermodal & Logistics: Do you plan to launch new services in Romania, in the near future?

Cătălin Petre: We have several projects underway. With the help of a business partner, we intend to launch a new service, through which we will connect the Black Sea, using the Port of Constanța, to the Western part of the Mediterranean Sea and Northern Africa. Moreover, another project underway is launching a container train which will connect the Port of Piraeus to the central part of Romania.

Our wish is to connect cargo flows from Central Asia, through the Port of Constanța and then on the Danube, through Central and Eastern Europe. We already have connections with Serbia and Hungary.

COSCO SHIPPING Lines (România)

COSCO SHIPPING Lines was founded in 2016, as a result of the merger between Cosco Container Lines and China Shipping Container Lines and is presently the fourth largest maritime transport line for cargo containers.

COSCO SHIPPING Lines (România) is one of the leaders in maritime transport in Romania. The company, as an exclusive agent of COSCO SHIPPING Lines, offers connections from to and from the main ports of the Far East, Middle East, Europe, Northern America, Africa, Australia and New Zealand, as well as integrated logistics services. The company has also established a presence in the Republic of Moldova and the Caucasus region (Georgia, Armenia and Azerbaijan), coordinating its activities using sub-agents from these areas.