Quick Take: COSCO in Tie-Up to Boost Port Efficiency

State-owned shipping and port giant COSCO Shipping Corp. is partnering with Singaporean logistics specialist GLP Pte Ltd. to add more logistical services to COSCO’s global network of ports.

COSCO is one of the world’s largest container terminal managers, with a portfolio of 35 ports as of the end of 2017. But large portions of the land that it owns rights to at its terminals remain underutilized or unused, resulting in a wasted business opportunity.

Most of that excess land is now used for low-end purposes such as repairing containers, but the company wants to use it for higher-value-added services such as logistics, said Zhang Wei, managing director of COSCO’s subsidiary COSCO Shipping Ports Ltd.

Zhang said that GLP is an experienced logistics operator, with a large client base along with more than 62 million square meters in logistics and industrial facilities worldwide. A Shenzhen-based COSCO unit that specializes in supply chain services will also participate in the partnership for storage and customs clearance services, Zhang said.

The revamp will start with COSCO’s ports in China and eventually expand to its terminals in other countries, Zhang said. The company also runs ports in Southeast Asia, the Middle East, Europe and the Mediterranean.

The tie-up is the latest major project in China for GLP after it was privatized for $11.6 billion at the start of this year by a Chinese consortium led by property giant Vanke. In February, GLP announced the establishment of its first value-added fund in China with insurer China Life. The fund will focus on acquiring logistics and industrial assets in China.

Contact reporter Coco Feng (renkefeng@caixin.com)