High Shipping Costs Are Here to Stay, Says Bloomberg
By Henry Ren (Bloomberg) Stubbornly high shipping expenses for businesses are getting sealed into contracts for the next 12 months, forcing companies to pass the extra costs on to consumers....
By Mike Wackett (The Loadstar) – Cosco Shipping Holdings resumed trading on the Shanghai Stock Exchange (SSE) today, more than two months after its shares were suspended on the bourse.
The move brings an end to speculation that Cosco had another carrier target on its radar, after it announced plans to scoop up OOIL’s OOCL earlier this month.
Nevertheless, there remains some uncertainty that the OOIL transaction will overcome all the regulatory hurdles. The SSE issued a letter of enquiry on 18 July requiring clarification on two specific points of the deal.
These relate to concerns as to whether the transaction would clear anti-trust and monopoly regulators around the world and how Cosco intends to keep OOIL listed on the Hong Kong Stock Exchange, as committed.
Alphaliner reports that the SSE received a response yesterday, which it must have found sufficiently reassuring to allow Cosco’s shares to resume trading.
The consultant said Cosco had confirmed that the transaction was subject to regulatory review in the US and the EU, but apparently made no mention of Chinese or other official bodies.
Cosco said it held “a positive attitude” to the anti-monopoly reviews based on “preliminary judgements”, but conceded that there existed a “certain degree of uncertainty” over the outcome.
According to the analyst, Cosco and SIPG, which will buy 9.99%, confirmed they intended to maintain OOIL’s listing status on the HKSE via a series of measures that would include issuing new shares to independent third-party investors.
They have also pledged to maintain the OOIL/OOCL staff compliment, saying on 9 July they would not “terminate any employee at OOIL, as a result of this transaction, for at least 24 months after the close of the offer”.
In practice, however, during this period there will be management changes, leading to executives at OOCL “seeking new employment challenges”, which along with natural wastage may change the culture at OOCL.
One UK recruitment consultant recently told The Loadstar it already had a number of OOCL executives on its books who, he said, were all “highly prized” assets that “would be in demand”.
The Loadstar is fast becoming known at the highest levels of logistics and supply chain management as one of the best sources of influential analysis and commentary.
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