<\/p>\n
The BYD Shenzhen slipped its moorings from the southeastern Chinese port of Xiamen in late November to embark on a high-stakes journey across the Pacific with 1 768 new electric vehicles onboard. The mission: get to Mexico before recently announced tariffs on Chinese imports kicked in on Jan. 1.<\/p>\n
After sailing through stormy seas on a hastily-plotted route, the freighter arrived at L\u00e1zaro C\u00e1rdenas seaport on Dec. 21, saving the world\u2019s largest EV maker millions of dollars in duties. That it did so with time to spare, when others were scrambling to charter cargo ships, was a testament to why one of the largest private fleets in China\u2019s auto industry gave BYD an advantage over competitors during turbulent times.<\/p>\n
With the Iran conflict roiling freight routes and sending shipping rates soaring, BYD\u2019s fleet of eight carriers is coming in handy again as the company bets on exports to pull it out of a yearlong earnings slump. Born out of necessity in 2022 in the wake of the Covid pandemic, when BYD realised it couldn\u2019t count on ships for hire, the Chinese company is now able to ferry about 300 000 cars worth billions of dollars a year to Africa, Europe, Latin America, and even the Middle East.<\/p>\n
Read:
The big question facing owners of Chinese cars
Xi eyes consumers to lead new era for China\u2019s unbalanced economy<\/p>\n
According to BYD, its ships have succeeded in \u201cconverting systemic geopolitical risk into a precisely calibrated operational certainty.\u201d\u00a0Nowhere is that more so than around the Arabian Peninsula, a key transportation corridor for exports from Asia to Europe, with BYD vessels\u00a0plotting routes to save time and money in waters that other commercial ships fear to navigate.<\/p>\n
Earlier this month, the BYD Shenzhen made its way to the United Arab Emirates port of Khor Fakkan near the tension-filled Strait of Hormuz, despite the threat of renewed hostilities nearby between the US and Iran. The company said it successfully unloaded cargo in the UAE before heading next for the Red Sea, another Middle East\u00a0hot spot.<\/p>\n
BYD\u2019s vessels have also continued transiting through the Suez Canal on voyages between Asia and Europe\u00a0this year, in contrast to most other cargo traffic opting\u00a0for longer and costlier trips around South Africa\u2019s Cape of Good Hope. That detour adds about 25% in distance, or as long as 14 extra days for seaborne cargo, compared with a Red Sea route via the Suez Canal.<\/p>\n
\u201cThis is a notable divergence from broader market behaviour and suggests BYD is confident in the safety of its vessels and crew through the Red Sea corridor,\u201d said Andrea De Luca, a consultant at maritime data analytics firm Veson Nautical.<\/p>\n
While it isn\u2019t new for automakers to operate\u00a0fleets, carmakers have traditionally done so through subsidiaries that transport their cars and lease\u00a0them out to other brands.\u00a0BYD\u00a0is different as its ships are reserved exclusively for its own cargo, even if that means they could come back nearly empty.<\/p>\n
\u201cWe still don\u2019t have enough ships\u201d, Stella Li, BYD\u2019s senior vice president and the key executive for its global expansion, said in an interview last month. \u201cHaving our own vessels has helped us a lot.\u201d<\/p>\n
ADVERTISEMENT<\/p>\n
CONTINUE READING BELOW<\/p>\n
The BYD Shenzhen, named after the city in which BYD is based, is one of the largest vessels in the company\u2019s fleet, stretching\u00a0almost 220 meters (720\u00a0feet) in length and 38 meters across, standing\u00a016 decks tall and capable of carrying as many as 9,200 vehicles. It\u2019s at the vanguard of a push overseas by BYD to meet growing demand for low-emission vehicles and tap growth beyond an\u00a0increasingly challenged Chinese market.<\/p>\n
Chinese car exports rose 21% to more than 7 million vehicles last year, according to data released by the China Association of Automobile Manufacturers, an industry trade group. That has provided an important safety valve to offload excess inventory building up in China. Many of those were delivered on Chinese-operated container or specialised roll-on, roll-off ships.<\/p>\n
\u201cOwning a vessel can save them so much money and help them reach key markets faster,\u201d said De Luca, noting higher auto\u00a0export volumes from China have made it harder\u00a0to secure chartering services.<\/p>\n
It\u2019s expensive to ship cargo from China nowadays. Spot container rates in China have surged 61% since the onset of hostilities in Iran.<\/p>\n<\/p>\n
All in the family<\/p>\n
For BYD, the in-house fleet isn\u2019t just a tool to ramp up exports. It also aligns with BYD\u2019s playbook of reducing outside variables to cut costs and boost efficiency. While many of its overseas vehicle-assembly peers regularly sell off assets to focus on core competencies, the automaker aims to maximise self-sufficiency in the supply chain. It\u2019s gotten to the point that BYD makes 75% of the components used in one of its most popular car models, according to a 2023 analysis by UBS AG.<\/p>\n
That\u00a0drive means the company makes its own EV batteries and computer chips, owns its own lithium mines and operates a proprietary armada.\u00a0The strategy gives BYD more control over its own destiny, but it\u2019s an expensive undertaking and not without risks.<\/p>\n
In the shipping business, those perils include heavy investment in maintenance and personnel, the potential for losses due to weather, war or piracy and its own long-term goal of replacing exports with localised vehicle production in the overseas markets where it operates.<\/p>\n
\u201cIt puts them under immense pressure to increase exports because of these sunken costs,\u201d said Matthias Schmidt, European autos analyst at Schmidt Automotive Research. \u201cThey need high utilisation to make the investment worthwhile.\u201d<\/p>\n
ADVERTISEMENT:<\/p>\n
CONTINUE READING BELOW<\/p>\n
BYD hasn\u2019t disclosed how much it spends on its fleet, or how soon it intends to break even on those investments. It declined requests for interviews about its logistics operations and fleet management.<\/p>\n<\/p>\n
In addition to geopolitical volatility, its ships allow BYD to be nimbler during bad weather.<\/p>\n
In January, the BYD Changsha was forced to seek shelter off the coast of Spain to avoid a winter storm with gale-force winds and swells reaching 9 meters. It headed to safer waters west of the Strait of Gibraltar for nearly a week. But facing inventory shortages and mounting customer demand, BYD was anxious to get the cargo to port, according to the company.<\/p>\n
\u201cWe identified a window of only a few hours where the storm broke and commanded the ship to push through at full power while the rest of the industry remained paralysed,\u201d the company\u2019s head of logistics, Deng Huaiyu, was quoted as saying in the BYD account. \u201cBy the time we cleared the storm, a group of third-party vessels was still stranded behind us.\u201d<\/p>\n
Following instructions from a BYD operations team that closely monitored prevailing conditions, the vessel raced full steam ahead to escape the storm and arrived safely in the UK on 3 February.<\/p>\n
BYD got into the seafaring business in the aftermath of the supply chain collapse during Covid. Exporters around the world were feeling a cost pinch as daily charter rates for a 6 500-unit car carrier skyrocketed from $10,000 in 2020 to $110 000 in 2023, based on data from Clarksons Research, a London-based data and analytics provider.<\/p>\n
Deng recalled the indignity of being bumped by third-party shipowners at the last minute despite booking in advance.<\/p>\n
\u201cTransport became the greatest bottleneck to our global ambitions,\u201d he was quoted as saying. \u201cWe had the technology, the capacity\u00a0and the market, but no transport.\u201d<\/p>\n
Orders for 233 vessels were placed globally from 2022 to 2024, according to data from Clarksons, compared with only 13 orders from 2018 to 2020 before the onset of the pandemic. Delivery of that backlog of ships has picked up pace over the past two years, many of them for China\u2019s automakers.<\/p>\n
ADVERTISEMENT:<\/p>\n
CONTINUE READING BELOW<\/p>\n
\u2018Strategic cooperation\u2019<\/p>\n
During a local government forum in Guangdong province in February 2024, BYD\u2019s founder and chairman, Wang Chuanfu, vowed to operate a fleet of eight ships within two years to \u201calleviate the shortage of export logistics and promote the NEVs built in the province to roll into more regions,\u201d referring to new-energy vehicles, including battery-electric cars. That decision was also encouraged by the Chinese government as part of its export promotion plan.<\/p>\n
As early as May 2023, China\u2019s Ministry of Commerce called out \u201clogistics bottlenecks\u201d as structural threats to the automotive industry\u2019s profitability. As a result, Beijing pledged to facilitate \u201cstrategic cooperation\u201d between China\u2019s carmakers and shipping operators and incentivise shipping lines to accelerate the rollout of dedicated car-carriers to scale up export capacity.<\/p>\n
In September, eight ministries outlined a national strategy to bolster the automotive industry\u2019s growth, explicitly calling for the modernisation of China\u2019s car carrier fleet and port infrastructure. Crucially, they encouraged cross-shareholding and joint ventures between carmakers and shipping companies to lock in long-term stability, although only a few such capital tie-ups have been announced publicly since.<\/p>\n
Chinese automakers such as Chery Automobile Co and Geely Automotive Holdings, which are among the largest exporters, operate only a handful of their own ships, and Chery does so only through a joint venture. Others like Dongfeng Motor Group Co, Guangzhou Automobile Group Co and Great Wall Motor Co rely entirely on global shipping giants, including Shanghai-based Cosco Shipping Holdings Co, Norway\u2019s Wallenius Wilhelmsen ASA and Grimaldi Group SpA of Italy.<\/p>\n
Another major player is SAIC Motor Corp whose Anji Logistics unit operates dozens of ocean-going vessels. With an annual export capacity targeting 600 000 vehicles, its flagship Anji Fortune is a 9 500-car behemoth. But even that pales in comparison to the Glovis Leader, the world\u2019s largest vehicle carrier, which is capable of hauling 10 800 vehicles on a single voyage. Operated by Hyundai Motor Co sister company Hyundai Glovis Co, it\u2019s the flagship of the Hyundai Motor Group\u2019s fleet of around 100 vessels that make up more than 10% of global car-carrier capacity.<\/p>\n
\u201cIt is a big benefit,\u201d Hyundai Motor chief executive officer\u00a0Jos\u00e9 Mu\u00f1oz said in a recent interview. \u201cWhen things go normal, it\u2019s not a big difference. But when things go wrong, you have an advantage.\u201d For Mu\u00f1oz, a carmaker\u2019s sales volumes should never be determined by a shipping schedule. \u201cCapacity cannot be my limiting factor; my limiting factor has to be the demand.\u201d<\/p>\n
Like Japanese carmakers such as Toyota Motor Corp and Nissan Motor Co, Hyundai has maintained its export prowess even as it steps up investments in local manufacturing operations in many of its biggest markets, including the US. BYD may follow suit, seeking to balance its domestic capacity with efforts to build a production base in countries such as Brazil and Hungary. Both are key to BYD\u2019s ambitious goals for overseas markets to account for 50% of its total sales, up from about 23% in 2025.<\/p>\n
\u201cRegardless of our overseas manufacturing footprint, the volume of complete vehicle exports from China will remain substantial, as per what our Japanese and Korean predecessors have witnessed,\u201d BYD logistics chief Deng said in the company publication. \u201cA massive portion of that permanent export demand will still be carried by our fleet.\u201d<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n
#BYD #edge #ships #brave #war #outrun #storms<\/p>\n","protected":false},"excerpt":{"rendered":"
The BYD Shenzhen slipped its moorings from the southeastern Chinese port of Xiamen in late…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[4],"tags":[9492,9292,4603,12854,502,222,684],"_links":{"self":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts\/6993"}],"collection":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=6993"}],"version-history":[{"count":0,"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts\/6993\/revisions"}],"wp:attachment":[{"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6993"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6993"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6993"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}