A major commercial dispute has erupted between Israel Corporation's subsidiary Zim Integrated Shipping Services and China Shipping Container Liners.
Sources informed 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 in which Zim would lease capacity on China Shipping container ships on routes between Chinese and northern European ports. Zim was due to lease 4,000TEU 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 266,432TEU orderbook is equivalent to 96.7 percent of its existent fleet.
Zim however, has recently cancelled a six-ship order at CSBC in Taiwan, but its orderbook overhang is still large.
Zim has linked with the Grand Alliance on certain routes to mitigate losses this year.
Tracey Jia
