A major restructuring move at Cosco Container Lines Americas will result in most regional offices closing in favor of a larger, more centralized North American Operations Center to be opened early next year, the location of which is yet to be determined.
Cosco Americas announced the move today, saying it would close offices in Boston, Charleston, Chicago, Henderson, New York, Norfolk, San Francisco and Seattle. All functions will be transferred to the new operations center to be opened by January 2015, the company said. In addition, most of the customer service and operation functions performed at the Secaucus, New Jersey, headquarters will also be transferred.
“CCLA believe that the restructuring will improve overall performance and efficiency of the company, and the company will also be able to provide superior and value-added services to its customers,” the company said in a press release. “CCLA’s US customers will continue to receive uninterrupted service from our experienced service representatives during the restructuring.”
The company said it plans to finish the restructuring by year’s end. The company pledged to keep its customers well-informed on the process.
Cosco Container Lines Americas is the North American unit of Cosco Container Lines, headquartered in Shanghai and known as Coscon. Coscon’s operations are managed by regional offices in New York, Hamburg, Sydney, Tokyo, Seoul, Singapore, Dubai, Johannesburg and Beijing. Cosco in the U.S. was ranked 11th for exports and 8th for imports for 2013 on the JOC’s Top 40 Container Carriers list. The company is the fifth-largest global container carrier, with a worldwide share of deployed capacity of 4.3 percent as of July 8, according to Alphaliner.
Cosco Container Lines has 85 representative offices in 49 countries around the world, while operational agencies are located in 1,000 different cities in 160 countries.
Although China Cosco Holdings reported a profit in 2013, removing the risk of being delisted, its core shipping operations performed poorly. The company was in danger of being delisted on the Shanghai Stock Exchange after two years of losses; however, Cosco reported an annual net income of ￥235.5 million (about US$38.3 million) in 2013, compared with net losses of ￥20 billion in 2011 and 2012, a result largely achieved through a series of asset sales to the parent company. Revenue was ￥66.1 billion, down 3.1 percent from ￥68.3 billion, mostly because of lower freight rates.
According to data from PIERS, the data division of JOC Group Inc., Cosco’s market share of all laden containers moving in and out of the U.S. through May of this year stood at 4.1 percent, versus 2013 total market share of 4.4 percent and a 2012 market share of 4.1 percent.
The company said offices in Houston, Montreal, Toronto, Vancouver and Long Beach, California are not on the list of office closures. Cosco Container Lines Americas, Inc. employs 314. Howard Finkel, executive vice president, said most of the jobs at the closing regional offices will be transferred, not terminated.
“We are working on a plan, we don’t have anything 100 percent yet,” Finkel said. He also underlined that the move was being done for efficiency purposes. “We will make sure all employees are taken care of, and they may be offered employment at the new operations center.”
Finkel said the company is evaluating all options for the new operations center, including new construction or finding a building. All locations are on the table, he said.