China wants to corner another segment of the global auto industry: car shipping


An EU-made car being prepared to be loaded for export in Germany, February 2020.

in a roll

Before the car hits the road, it may be sailing on the high seas aboard a large purpose-built vessel, a roll-on/roll-off car carrier.

These large ships, which resemble giant floating garages, can carry thousands of cars at once. Japan, long a car powerhouse, has built the world’s leading car carrier for decades. According to data from Clarksons Research, nearly 40% of the world’s car carriers are made in Japan, as measured by both vessel numbers and loading capacities.

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In contrast, Chinese ships make up only a small part of the international fleet, according to financial news site Yicai, for medium to long sea travel (link in Chinese).

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But as China’s auto exports soar, driven by the sale of electric vehicles, Chinese manufacturers are increasingly seeking greater control over the maritime transportation segment of the auto supply chain. Some Chinese firms, like EV giant BYD, have already transformed into shipping companies. Meanwhile, Chinese shipyards are busy building dozens of new car carriers.

A recent article in China Auto News (link is in Chinese) declares that “China’s car exports will not be choked by sea freight.” “There is an urgent need to develop ‘domestic cars and domestic transportation.’”

From lifting to rolling, the history of car carriers

Roll-on/roll-off car carriers (ro-ro for short) are so called because the cars are loaded onto the ship at a ramp at the departure port and offloaded at the destination.

According to shipping industry veteran and former U.S. Freight Commissioner James McNamara, before ro-ro ships were developed, derricks and cranes were used to physically load cars onto cargo ships to transport them. had to be lifted to

By the early 1960s, European and Asian car exports had grown beyond the capacity of conventional freighters, explained McNamara in a recent FreightWaves article on the history of car carriers.

The automobile industry now uses bulk carriers to carry commodities such as grain, soybeans and coal on the outbound journey and cars on the return journey. However, individually lifting cars onto these ships was still a time-consuming and labor-intensive process.

Finally, a roll-on/roll-off system took shape. Japanese shipping company Mitsui O.S.K. Lines said on its website:

In 1965, Mitsui O.S.K. Lines launched the first Japanese-made ro-ro vessel named Oppama Maru, capable of transporting 1,200 cars and loading 100 vehicles per hour. According to McNamara, by the 1980s bulk freighters were rapidly being replaced by the large ro-ro ships that still transport cars around the world today.

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However, data from Clarkson’s Research shows that global car carrier capacity growth has declined sharply over the past decade. His two consecutive years of negative growth in 2019 and his 2020 were a far cry from the high growth of the early 2000s, overturning his decade of underinvestment in newbuildings and his two years after that. had very low growth.

But this period of stagnation in the fleet coincides with rising car sales worldwide. These parallel trends have led to a shortage of space on car carriers. Pandemic-related supply disruptions in his chain, combined with a 300% rise in car shipment rates from 2020 to the end of last year, according to Chinese media reports (link in Chinese). The economic crises in Argentina, Iran and Turkey in 2019 hit car imports. Then, in 2020, the pandemic hit and the demand disappeared.

China is buying new car carriers

Currently, China is aiming for a large share of the global automobile industry by entering the overseas market with EVs, so it is also focusing on the field of car carriers.

Chinese shipyards received orders for at least 58 new car carriers last year, according to Clarksons Research. This is more than the entire current fleet, and she accounts for over 86% of all global orders.

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For China, the commercial advantages of operating its own fleet are numerous. China may provide transportation to control costs and make its cars more competitively priced, refusing transportation services to rival companies and countries.

There may also be military implications.

Mike Dahm, a former U.S. Navy intelligence officer and now principal analyst at IT and engineering firm Miter Corporation, writes about the Chinese military’s potential use of ro-ro ships as amphibious landing craft in military operations. . Invasion of Taiwan.

For example, the Jiangnan Shipbuilding Group, which received an order for three new car carriers last year, is a subsidiary of the state-owned China Shipbuilding Corporation licensed by the US government.

But primarily, the acquisition of Chinese car carriers is a big bet on the continued growth of global car sales and the simultaneous increase in demand for car shipping capacity. China believes this will be a very lucrative sector. The state-run China Economic Information Network perhaps best describes it. With the car export boom, the outlet recently said (link is in Chinese) that car carriers will become “machines that print money at sea.”

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