Shanghai: A major commercial dispute has erupted between Israel Corporation subsidiary Zim Integrated Shipping Services and China Shipping Container Liners.
‘Sources inform Israeli business newswire Globes that China Shipping is accusing Zim of breaching a cooperation agreement on routes between Asia and European ports. Although China Shipping initially threatened to go to court, the case will probably end up in international arbitration. In September 2008, Zim and China Shipping reached a commercial understanding under which Zim would lease capacity on China Shipping container ships on routes between Chinese and Northern European ports. Zim was due to lease 4,000 TEU (twenty-foot equivalent units) on China Shipping’s weekly service, on which it operates eight large container ships. Zim is already on Seatrade Asia Online’s container endangered list by virtue of its fearsome orderbook – the largest by proportion of any major carrier. According to box watcher AXS-Alphaliner, Zim’s 266,432 teu orderbook is equivalent to 96.7% of its extant fleet. Zim moved to cancel six ship orders at CSBC in Taiwan earlier this year, but its orderbook overhang is still too large. Zim has linked with the Grand Alliance on certain routes to mitigate losses this year.