Ocean Network Express (ONE) “set sail in choppier waters than we had expected”, MOL president and chief executive Junichiro Ikeda said in his 2019 New Year message addressed to all officers and employees.
He said that ONE – which combined the container operations of Japanese carriers MOL, NYK and K Line from April 2018 – did not reach its projected liftings due to disruptions in initial operations.
He added “However, the cost savings derived from integrating the container ship operations have surpassed estimates before the integration. We also know exactly what must be done to improve cargo volume liftings and earnings. We will closely heed the lessons we have learned from ONE’s results to date as we fulfill our governance responsibilities as an investing company of this business venture.”
He emphasised “In the process, I will redouble my commitment to ONE and provide any support necessary to ensure the venture’s success.”
Back in August it was reported that ONE had fallen into the red with a net loss of US$120M for Q2 2018 (Japanese Q1 financial year) in its first set of financial results since the launch of the joint venture. Revenue totalled US$2.1Bn.
Elsewhere Mr Ikeda mentioned challenges ahead. “The external environment has become increasingly uncertain in terms of the global political and economic picture, mainly due to strained US-China relations and the possibility of a hard Brexit.”
He singled out the enforcement of new sulphur oxide emissions regulations in January 2020. “It is no exaggeration to say that the enforcement of these regulations will mark a major turning point that will have a crucial bearing on the success of the MOL Group as well as the marine transport industry as a whole,” he said.
Mr Ikeda said that MOL needs to re-examine whether its preparations are “adequate on the sales and marketing fronts and identify any hidden risks”.
He summed up “As professionals in the marine transport business, we will draw on the MOL Group’s full range of experience and knowledge to rise above these changes.”
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