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2017 a year of growth for OOCL, says Chairman

 

As per OOIL’s 2017 results announced on Monday, its container transport and logistics business reported EBIT of $ 105 million, representing an operating margin of approximately 1.7 per cent, said a release.

 

Liner liftings grew to 6.3 million TEUs and the Group took delivery of five 21,413-TEU newbuildings in 2017 and received the sixth in January 2018.

 

Also, Phase II of the construction of Long Beach Container Terminal was completed with operations commencing in October 2017.

 

Besides, there has been continued progress in digital technology, and in the build out of the logistics business, the release said.

 

The Chairman of OOIL, Mr C. C. Tung, said, "The economic backdrop for 2017 was more robust than forecasters had expected. Following a decade of low growth, we saw healthier performance in both GDP and trade volumes across most of the world’s major economies. This was a welcome change after the industry’s low point of 2016.

 

"However, growth on the supply side continues across the trade lanes. Even if the ordering of new vessels remains muted in relative terms, upsizing of capacity continues in certain key routes. Ultra-large vessels ordered in the past few years are now being delivered and brought into operation. Furthermore, as trade growth improves, the industry continues to introduce additional services using cascaded or previously idled capacity.

 

"This combination of better economic growth and continuing (if moderated) growth in supply, along with higher bunker prices, means that for OOIL and our peers, the environment remains merely one of gradual recovery, not the boom that some analysts expected when improved economic data first started to appear.

 

"2017 was a year of tremendous growth for OOCL in both European and US bound trades. For the full year 2017, OOCL’s liftings were up 3.6 per cent overall, but 16.3 per cent on Trans-Pacific and 19.7 per cent on Asia-Europe. This growth outpaced the already strong volume growth seen in the market as a whole.

 

"One of the cornerstone strategies for many years of the OOIL group has been to work in alliance. We are now almost into the second year of the Ocean Alliance with COSCO, CMA CGM and Evergreen. Alliance membership continues to deliver meaningful benefits in terms of network and scale, and very much remains part of delivering our growth strategy.

 

"OOCL Logistics (OLL) continues to develop steadily and profitably. The profitability of OLL’s domestic logistics activities improved. OLL’s core business of managing the international supply chains of large retailers in North America and Europe retained its role as the key profit driver. The goal is to build and grow the business, in what is unquestionably a highly competitive market.

 

"A key element of being able to deliver this total service is our approach to digital technology. In addition to enhancing supply chain visibility for customers, we are also embracing the use of data analytics to enhance yield management and internal operating efficiencies. The OOIL group remains fully committed to continuing its quest to invest in the development of digital technology.

 

"Once the large new vessels scheduled to be delivered in 2018 have been brought into service, with a comparatively low order book 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. In the meantime, we maintain a positive, if somewhat cautious, stance," remarked Mr Tung.

 

Source : Exim News Service - Hong Kong, March 12

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