Chinese shipbuilders are rapidly constructing vehicle carriers to meet the soaring demand for automobile shipments, fueled by the country’s burgeoning automobile exports.
China COSCO SHIPPING Corporation Limited (COSCO SHIPPING Group), a prominent shipping giant, has taken the lead in constructing a fleet of ships dedicated to serving the nation’s automobile exports. The company has established a special team for supply chain-related tasks, initiated projects for a digital supply chain in the automobile industry, and ordered professional ro-ro (roll-on/roll-off) ships. Additionally, innovative business models and service platforms have been set up to offer customers personalized, custom-made, and diversified solutions for whole-vehicle exports.
Last year, COSCO Shipping Specialized Carriers Co., Ltd., a subsidiary of COSCO SHIPPING Group, collaborated with Shanghai International Port Group Logistics Co., Ltd. (SIPGL) and SAIC Anji Logistics Co., Ltd., a wholly-owned subsidiary of Chinese car manufacturer SAIC Motor, to establish Yuanhai Car Carrier Transportation Co., Ltd. The primary objective of this venture is to build a world-class fleet of vehicle carriers to facilitate Chinese automobiles’ expansion into global markets.
Zhu Guihua, director and general manager of Yuanhai Car Carrier Transportation Co., Ltd., revealed that the company has already put two vehicle carriers into service, each with a capacity of 5,000 car spaces. The company has placed orders for an additional 24 ships, to be delivered by the end of 2026, bringing the total number of vehicle carriers to 30 and the annual capacity for shipping Chinese commodity automobile exports to over 700,000 units.
Shanghai Waigaoqiao Shipbuilding Co., Ltd., a subsidiary of China State Shipbuilding Corporation (CSSC), is actively engaged in constructing vehicle carriers to meet the high demand. Zhang Qipeng, deputy general manager of Shanghai Waigaoqiao Shipbuilding Co., Ltd., stated that the shipyard currently has orders for ten vehicle carriers, each costing around $100 million. This surge in orders contrasts sharply with previous years when getting even one order in a year was challenging.
Currently, over 90 percent of automobile exports from China are transported by sea, with ro-ro ships being the primary mode of transportation. However, China only operates around ten oceangoing ro-ro ships out of more than 700 worldwide.
China has witnessed significant growth in automobile exports in recent years, exporting over 2 million automobiles in 2021 and more than 3 million in 2022. Data from the China Association of Automobile Manufacturers indicates that automobile exports surged 75.7 percent year on year to 2.14 million units in the first half of 2023. This robust expansion has led to an increased demand for automobile transportation, causing challenges for automakers and companies involved in exporting and importing automobiles, as freight costs have escalated dramatically.
The construction of vehicle carriers is a crucial step to address the soaring demand for automobile shipments and support China’s position as the world’s largest exporter of automobiles. As the country’s automobile exports continue to surge, the emphasis on building a robust fleet of vehicle carriers is expected to play a pivotal role in facilitating further growth in global markets.