Saturday, December 29, 2012

Container Shipping and Bulk Freight Giant Reflects on the Past Year

Eventful Time for Japanese Ocean Carrier
Shipping News Feature

JAPAN – A review of events covering the past year’s activities by Mitsui OSK Lines (MOL) provides an interesting précis of today’s market for a typical shipping group which now spreads its interests across both the container and bulk freight sectors. A year after the Great East Earthquake and Tsunami, and the literally nuclear ramifications which followed, the Japanese company still reeled from both direct and indirect impacts which the events of March 2011 had upon its own organisation and the entire country.

From a business point of view MOL’s figures, like so many other shipping groups, continue to disappoint. The company anticipates a loss for the 2012 financial year, the second consecutive year of red ink following a 24.3 billion yen consolidated ordinary loss for FY2011 due to factors such as the appreciation of yen, a steep rise in bunker prices, and fleet oversupply. To mitigate the damage for 2012 the company says it has been working to increase the use of slow steaming, scale down the tramp fleet (scrapping/cold lay-up of 10-20 Capesize dry bulkers, and scrapping of double-hull tankers), and promoting other rationalization efforts.

To cut costs and promote more business on the containership side MOL established Key Performance Indicators (KPI) whilst instituting its ‘Count on MOL’ initiative and launching an Asia-Europe containership service in partnership with its other G6 Alliance members and transferring its containership HQ to Hong Kong. In January the group also signed a VLCC pool agreement then launched a weekly service to Myanmar in March, established a subsidiary in Peru in April and expanded further into the energy market by signing a long-term contract for two new LNG carriers with Kansai Electric Power Inc. two months later.

Safety and environmental concerns overlap fuel saving measures and once again featured prominently with the launch of world’s first newbuild hybrid car carrier Emerald Ace, whilst the establishment in Japan of a full-mission bridge simulator and introduction of a new double-hull tanker loading/discharging simulator in the Philippines seafarer training centre, together with improved training programmes helped prepare the latest generation of trainee seafarers.

Over everything however loomed the cloud that was the aftermath of the previous year’s disaster and MOL’s support activities during the crisis were recognised in July by the Minister of Land, Infrastructure, Transport and Tourism and the company’s support of relief efforts in the wake of the deadly typhoon on Mindanao earned a commendation from the Philippine House of Representatives whilst donations from MOL also funded a daycare centre in the Philippines which officially opened in November.

Photo: MOL can trace its history back to 1878 when Mitsui Bussan Kaisha (Mitsui & Co., Ltd.), which focused on bulk cargo trade, purchased an iron hulled steamer from the U.K. and named it the Hideyoshi Maru.