One reefers

The traditional Japanese shipping lines’ new year messages to staff were generally positive, reflecting the improving financial results of the industry – but concerns remain over a possible slowdown in demand.

K Line president and chief executive Yukikazu Myochin said the “poor market conditions and a temporary deterioration in the bottom line, caused by the teething problems of ONE’s first year of operation”, were in the past and that the group expected to remain in the black for its fiscal year ending 31 March.

He said: “ONE is now at the stage where it can achieve more synergy through best practices, and we expect further improvements in meeting the bottom line.”

MOL president and chief executive Junichiro Ikeda said that, generally, “the year ended on a strong note”.

Referring to the liner sector – MOL is a 30% stakeholder in ONE – Mr Ikeda was cautiously optimistic.

“The containership business recovered from a slowdown in profits in the previous fiscal year,” he said, adding he was hopeful that the improved performance of ONE would lead to the next stage in its growth.

However, Mr Ikeda was cautious on the global outlook for trading. He said: “I’m concerned about the effect on seaborne trade arising from the slowdown in worldwide economic growth.

“I cannot say when or how the economy might tumble into recession, but from my experience recessions can be categorised into two types: suddenly triggered by a specific factor; and occurring so gradually they are hard to determine.”

He added that there was a commonality between both types of recession and “we must, without fail, prepare for the hard times during the good times – like now”.

Mr Ikeda added: “An example of a measure we can take now is to limit our market exposure. When we say, ‘limit our exposure’, the first thing that may come to mind is fleet reduction, but the real issue is to prepare for the storm by enhancing the fleet’s market durability, while diversifying profit sources.”

Hitoshi Nagasawa, president of NYK – which holds a 40% stake in ONE – was more philosophical in his outlook. He said: “Change is occurring rapidly these days, and it is said that the future is uncertain. However, assuming the future is uncertain for everyone, we should advance together without fear of failing.”

In a motivational pitch to NYK’s 54,000 employees around the world, Mr Nagasawa added: “I want everyone to firmly express yourselves and achieve solid results.”

And HMM president and CEO Jae Hoon Bae gave a rousing new year message to his staff, declaring that the company was steaming “full ahead” to turn around its dire financial results this year. This, he pledged, would “eventually lead to a complete reconstruction of the Korean shipping industry” still tainted by the bankruptcy of Hanjin in 2016.

April will see HMM join THE Alliance after four years of being on the side lines as a slot charterer with the 2M. And Mr Bae reiterated HMM’s target of rebuilding its fleet to 1m teu of capacity.

According to Alphaliner data, HMM’s fleet capacity is currently 390,000 teu, ranking it the tenth-largest carrier. However, it has a significant orderbook of 419,000 teu, including 12 24,000 teu ULCVs. On delivery, it will move up one place, just behind Taiwan’s Yang Ming which, including its orderbook, will have a fleet capacity of some 844,000 teu.

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