Germany has blocked COSCO Shipping’s planned acquisition of an 80% stake in Hamburg freight forwarder Konrad Zippel, overriding an earlier competition clearance on national security grounds.

The federal cabinet approved the prohibition on Wednesday, with the economy ministry saying the transaction would have deepened strategic dependencies and threatened the resilience of German and EU supply chains.

Zippel specialises in container hinterland transport, moving cargo arriving at Hamburg and Bremerhaven onwards by rail, road and inland waterway to industrial centres in eastern Germany and neighbouring markets.

COSCO had already secured approval from Germany’s Federal Cartel Office in February. The regulator found no competition concerns because COSCO primarily moves containers by sea while Zippel operates further down the logistics chain. The separate foreign investment review, however, examined security and strategic issues. German intelligence officials subsequently raised concerns about the deal.

Zippel handles between 35% and 90% of container volumes at inland terminals in Berlin, Schkopau and Elsterwerda and also plays a role in logistics supporting Germany’s armed forces. Government officials warned that control of such infrastructure could create dependencies capable of being used as leverage during a political crisis.

The decision marks a harder line from Berlin following the long-running controversy over COSCO’s investment in Hamburg’s Container Terminal Tollerort. COSCO originally sought 35% of the terminal operator but was ultimately permitted to take just 24.99% after the German government intervened in 2022 over security concerns.

The latest prohibition comes as Germany prepares tougher investment-screening legislation aimed at giving Berlin greater powers to scrutinise acquisitions involving strategic infrastructure and technology.