MOL says it will operate ships of 20,000 TEUs in cost-cutting effort - Peter Tirschwell | Jan 05, 2015 9:25AM EST With MOL’s container business in the red and performing worse than the other Japanese carriers, the company’s president in New Year’s message said 2015 would be a “counteroffensive year” in which it would get more aggressive in cost-cutting including operatating the worlds largest containership of 20,000 TEUs. “I think many of you may be worried about our containership business. And the fact is, in terms of competitiveness and earnings strength within the industry, we are somewhat behind,” Koichi Muto wrote in a New Year message released on Monday. MOL is the largest of three Japanese container lines, as the 9th ranked carrier in terms of deployed capacity versus the 13th rank for NYK and 17th rank for K-Line, according to Alphaliner. In the six months through September, MOL for its container business reported a $99 million loss versus a $34 million loss during the year earlier period. K-Line saw profits in its container business rise to $87.1 million in the six month period from $13.7 million a year earlier. NYK Line saw profits jump from to $33.9 million $7.3 million. Looking back at the full year of 2014, he said the business would continue to be challenged, suggesting that results at least for the October-December period will underwhelm. “I regret to report that the containership division is showing a significant deficit for this fiscal term due to lower freight rates on Asia-South America East Coast routes, along with delays in the work to fully automate our U.S. terminal, despite increasing cargo volume, mainly on the East-West trade and considerable improvement in the business environment.” Yet he said the company would benefit from the depreciating yen and falling bunker prices, along with a decline in interest rates, factors he called “a strong following wind.” Muto pledged to address the deficits by redoubling efforts to contain costs, including operating a 20,000 TEU ship. According to IHS Maritime 360, a sister company of JOC, MOL is reportedly negotiating with the Canadian shipowner Seaspan, the worlds largest non-operating shipowner according to Alphaliner, to charter ships of that size. When contacted by IHS Maritime 360, MOL said, we cannot comment on details at the moment as the negotiation is still ongoing. We are negotiating with several parties and cannot yet give specific names. He had this to say to the employees of the container division: “There is still a lot of room to improve profitability with advancement of operations and yield management. Management and employees in the containership division need to objectively analyze our cost competitiveness and our sales capabilities, and put every effort into restoring profitability as the key objective. This is the critical point. Now is the time to be tenacious, and move forward.”
Posted on: Tue, 06 Jan 2015 00:19:24 +0000
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