News / Liftings and revenue shoot up as OOCL prepares for its new owners

OOCL’s parent company, Orient Overseas (International) Ltd (OOIL), returned to the black last year, posting a net profit of $138m after a loss of $219m in 2016.

OOIL published what is expected to be its last full-year results ahead of the $6bn acquisition of the carrier by Chinese state-owned Cosco Shipping and Shanghai International Port Group (SIPG).

Turnover at the Hong Kong-based group leaped by 15.1% year on year, to $6.1bn, with OOCL’s revenue up 15.4% to $5.4bn.

OOCL’s liftings improved 3.6% to 6.3m teu, with the Asia-Europe tradelane the star performer with an impressive 19.7% spike to 1.1m teu.

Transpacific carryings jumped by 16.3% to 1.8m teu, while OOCL’s transatlantic numbers were ahead 8.7% on the previous year to 430,000 teu.

However, the Hong Kong-based carrier saw its biggest region, intra-Asia and Australasia, suffer an 8.1% decline to 2.9m teu.

OOIL chairman CC Tung called 2017 “a year of tremendous growth for OOCL in both European and US bound trades”. He said growth for the carrier had “outpaced the already strong volume growth seen in the market as a whole”.

Mr Tung attributed much of OOCL’s success to its membership of a vessel-sharing alliance.

“One of the cornerstone strategies for many years of the OOIL group has been to work in an alliance,” said Mr Tung.

Noting that OOCL was now into its second year as a member of the Ocean Alliance, in partnership with CMA CGM, Evergreen and new owner Cosco, Mr Tung said: “We are delighted with the progress made so far, and already feel the benefit of greater efficiency through welcome cost gains.”

Last year, OOCL took delivery of five 21,413 teu ultra-large container vessels, the last arriving in January. Mr Tung said these new “titans of the sea” provided OOCL with not just additional capacity, but “with a more efficient cost base”.

In terms of the outlook he said that OOIL maintained a “positive, if somewhat cautious stance”.

“Once the large new vessels scheduled to be delivered in 2018 have been brought into service, with a comparatively low orderbook for 2019 and 2020, and taking into account the improved economic data, we are hopeful that the industry may start to enjoy greater stability than it has done for many years,” said Mr Tung.

After the takeover is complete, Cosco will own 90.1% of OOIL, with SIPG having a 9.9% stake.

Although Cosco says it intends to maintain the strong OOCL brand, it remains to be seen whether the iconic “we take it personally” mantra will survive under the new ownership. OOCL has 360 offices in 70 countries and many of the staff have told The Loadstar they “still do not know where they stand” in terms of employment continuity.

Based on current capacities, the new Cosco-OOCL entity will overtake Ocean Alliance lead line CMA CGM to become the world’s third-biggest container line, behind Maersk and MSC, with a market share of 11.8% and a combined capacity of 2.57m teu. This compares with CMA CGM’s 11.5% market share based on 2.51m teu.

Furthermore, Cosco has an orderbook of 443,000 teu, versus the French carrier’s 305,000 teu.