December 1, 2004
China Shipping to Extend Internal Restructuring to U.S. Trades
Effective January 1, 2005, China Shipping will extend its ongoing internal restructuring to the U.S. trades. Simply put, this internal restructuring involves the transfer of some China Shipping services from China Shipping Container Lines Co., Ltd. (“CSCL”) to its wholly owned subsidiary, China Shipping Container Lines (Hong Kong) Co., Ltd. (“CSCL (Hong Kong)”).
The restructuring began outside the U.S. trades over two years ago with the formation of CSCL (Hong Kong) as a wholly owned subsidiary of CSCL. Over the past two years, certain services outside the U.S. trades have been transferred from CSCL to CSCL (Hong Kong). Today, China Shipping services outside the U.S. trades are operated by both CSCL and CSCL (Hong Kong) under the China Shipping tradename and trademarks.
Effective January 1, 2005, this restructuring will be extended to the U.S. trades. As a result, China Shipping services in the U.S. trades will be operated by two companies rather than one. From our customers’ perspective, however, there will continue to be only one China Shipping. Whether a customer is utilizing a China Shippingservice operated by CSCL or one operated by CSCL (Hong Kong), the customer will receive the same China Shipping rates and services, whether the movement is rated under the applicable China Shipping tariff or an individual service contract.
From a practical standpoint, the restructuring will not affect the way customers currently book cargo, track cargo or process cargo claims with China Shipping. Customers may continue to book their cargo as they do now, and may continue to deal directly with the same China Shipping sales representative that currently handles their account. As mentioned above, the rates payable for China Shipping services, whether provided under a published tariff or an individual service contract, will not be affected by the restructuring.
To avoid any distinction between the China Shipping services operated by CSCL and those operated by CSCL (Hong Kong), the two companies have published common tariffs covering all China Shipping services in the U.S. trades. In addition, CSCL has asked all shipper parties to its service contracts to amend the contract to add CSCL (Hong Kong) as a carrier party to ensure that there is no disruption in the service provided under the contract. Likewise, CSCL has asked the carrier parties to its various carrier agreements to amend the agreements to included CSCL (Hong Kong) as a party, with both CSCL and CSCL (Hong Kong) being treated as a single party with joint and several liability.
Our vendors and suppliers should also rest assured that this restructuring will not affect the volume of suppliers or services required by China Shipping, or the obligations of CSCL under their individual contracts. CSCL and CSCL (Hong Kong) have established internal service arrangements that will allow CSCL to provide the benefits of these vendor and supplier contracts to CSCL (Hong Kong) while remaining directly responsible to the third party vendor or supplier under the contract. Vendors and suppliers may continue to invoice China Shipping as they currently do, and may continue to deal with the same China Shipping representative with whom they currently deal.
If you have any questions concerning this restructuring, please contact your China Shipping representative. Alternatively, you may e-mail any questions you may have regarding the restructuring .