HONG KONG, Oct 12 (Reuters) - China's top two shippinggiants, China COSCO and China Shipping, will join forces in amove that is a first for the domestic coastal container shippingindustry and which is aimed at weathering a severe marketdownturn.
China Shipping Container Lines Co Ltd (CSCL) saidit had agreed with COSCO Container Lines Co Ltd, a unit of ChinaCOSCO Holdings Co Ltd , to jointly operate trade routesfrom north and northeast China to Fujian and Shantou in thesouthern province of Guangdong from mid-October.
The two shippers, with a combined market share of 80 percentin the domestic coastal container trade, would each deploy shipsto jointly operate the routes, CSCL said.
"This move is just the start of an intensive cooperation indomestic container shipping between CSCL and COSCO," CSCL saidin a statement released on Friday.
Global container freight rates have been battered by aslowing global economy and supply glut last year. Rates have,however, rebounded in the second quarter on rising U.S. demandand shipping firms' determination to cut excessive capacity.
"Hopefully this cooperation can provide stability todomestic coastal shipping rates," said Geoffrey Cheng, ananalyst at BOCOM International.
Shares of both CSCL and China COSCO have outperformed thebroader market in the past five weeks, and were nearly 30percent from their year low on September 5. The blue chip HangSeng Index was up 10 percent in the same period.
Shares in China COSCO, which also operates the world'slargest dry bulk cargo fleet, are still down around 6 percent sofar this year, while CSCL's stock has been flat.
(Reporting by Alison Leung; editing by Miral Fahmy)
Keywords: CHINA SHIPPING/