China Shipping Group's (CSG) tanker and dry bulk unit, China Shipping Development, has chartered 21 bulk carriers from an affiliate for a six-month period, so as to avoid intra-group competition by making CSD its sole operator of bulkers.

According to an exchange filing in Hong Kong, CSD will lease 13 panamax bulkers with a total capacity of 975,000 dwt and eight handymax vessels with 454,000 dwt from China Shipping (HK) Holdings, directly controlled by CSG.

The carrier will pay up to US$70 million for the six-month charter period ending on June 30, 2014, reports Lloyd's List.

It said that reorganising its resources and reducing the management costs would boost its competitiveness.

"The leasing of the dry bulk vessels is expected to enable the company to enhance its international shipping capacity of dry bulk vessels and its share in the international bulk shipping market," CSD said in the filing.

"The relatively short charter period gives the company more flexibility, given the general market conditions in the shipping industry," it said.

In November, CSD chartered in two handysize bulk carriers from Dalian Shipping, a wholly-owned subsidiary of CSG, at a daily charter rate of $5,416 per ship. The charter period lasts until the end of 2016.

The carrier's board has also approved a plan to scrap 13 aged bulkers totalling 426,000 dwt earlier than their age limits. (Source : Schednet)