Electric car giant BYD has ordered its own auto transport ships—and may become a full-fledged shipping services provider.
Is BYD, the Chinese electric vehicle giant, turning into a shipping company?
As it aggressively pushes into markets overseas, BYD has ordered at least six massive car carriers, ships that can transport thousands of cars at a time. In part, BYD’s move reflects a keen frustration of the Chinese auto industry. Over the past two years, just as China’s vehicle exports boomed, pandemic-related supply chain snarls led to acute shortages of space on cargo ships.
Now, BYD appears to be maneuvering not only to ship its own products but also to offer global shipping services to other car manufacturers. Think car company meets ship owner meets shipping logistics provider, all rolled into one.
BYD isn’t the only Chinese car maker that’s getting into the shipping business.
Last July, SAIC Motor, the state-owned automaker, partnered with the Chinese shipping giant COSCO and the port operator Shanghai International Port Group to set up Guangzhou Yuanhai Car Carrier Transportation company.
“International marine transportation is facing the urgent situation of insufficient capacity, unstable capacity, and poorly connected logistics information, becoming a stumbling block for the globalization” of Chinese car makers.
The urgency of reliable shipping has become particularly acute as Chinese car exports have skyrocketed over the past two years. According to Chinese customs statistics, the value of vehicle exports in the third quarter of 2022 was $12.7 billion, more than five times higher than the same period in 2020.
Yet over the same period, growth in the global capacity of car carrier vessels lagged far behind, according to data from shipping services provider Clarksons, as cited by Bloomberg.
Of the roughly 750 car carriers in operation worldwide, China currently only operates a fleet of 10 such ships capable of long-haul maritime journeys, according to the automotive logistics firm Changjiu Logistics (link in Chinese, pdf).
As a result, Chinese carmakers struggled to find space on vessels to send their vehicles to overseas markets. As an article last month by the state news agency Xinhua put it: “As auto exports soar, even a single shipping space on car carriers is hard to find.” Companies that did snag such spots on ships reported paying vastly inflated prices. BYD’s ambition to own and run ships is a bid to better control the vagaries of the supply chain.
