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Wednesday, April 1, 2015

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Low costs pave the road to profitability

Posted to Far East Maritime (by Greg Knowler) on March 14, 2014

Bigger is better, was the message delivered by Alan Tung, the acting CFO of Orient Overseas (International) Ltd, parent of Hong Kong-listed OOCL, at the company’s annual results briefing this week. OOCL may not have the largest orderbook in the business…

Mega alliances no panacea for volatile rates, says Widdows

Posted to Far East Maritime (by Greg Knowler) on March 7, 2014

Shipping supremo Ron Widdows had no good news for customers expecting freight rates to be stabilized by the emergence of the mega alliances. The CEO of Rickmers Group said at the TPM conference in Long Beach this week that container lines had lost the ability to control freight rates.

Shipping line results are coming in and it isn’t pretty

Posted to Far East Maritime (by Greg Knowler) on February 28, 2014

There must be an upside to owning a global container shipping line. Maybe employees get discount rates when shipping personal stuff overseas. Maybe the captain can wear an eye patch and chase the bosun around growling, “Aaaaargh!”. It can’t be the money…

This just in: Cosco and CSCL were seen walking into a chapel

Posted to Far East Maritime (by Greg Knowler) on February 26, 2014

Cargo volumes will not grow enough this year to use up all the capacity flooding into service, and bargain basement freight rates are driving the carriers towards route-sharing alliances. Not to be outdone, China’s top two lines, Cosco and China Shipping…

Carrier groups get ready to duke it out on global trade lanes

Posted to Far East Maritime (by Greg Knowler) on February 20, 2014

News on the alliances dominated headlines this week, topped by Evergreen joining the CKYH alliance on Asia-Europe. Taiwan’s top carrier joins Cosco, "K" Line, Yang Ming and Hanjin, adding an “E” to the new CKYHE alliance. The CKYHE will start…

Statistics show that China is cleaning up its dodgy economic data

Posted to Far East Maritime (by Greg Knowler) on February 18, 2014

In 2011, the difference between the combined economic output of China’s 31 provinces and the national figure was the size of Turkey’s GDP. By last year that gap had “narrowed” to the equivalent of the GDP of Indonesia - almost US$1 trillion.

Success of HK emissions control zone will depend on China

Posted to Far East Maritime (by Greg Knowler) on February 12, 2014

By early next year, all ocean-going vessels calling at Hong Kong could be forced to switch to a low sulphur fuel while in port as the territory imposes an emissions control zone. All the city is waiting for is for Beijing to file an application…

US growth won’t help Asian exporters if China slumps

Posted to Far East Maritime (by Greg Knowler) on February 7, 2014

Conventional thinking has always been that a strengthening US economy was automatically good news for Asian exporters. But if the Chinese economy began to tumble, it would outweigh faster US growth, said Frederic Neumann, HSBC co-head of Asian economic research.

Asian shipping stocks stumble into Year of the Horse

Posted to Far East Maritime (by Greg Knowler) on February 5, 2014

Investors weren’t too distracted by the holiday spirit in the build up to the Year of the Horse and managed to shake off their hangovers while lunging for the sell button. Asian shipping stocks took a beating in December and the slide continued after markets reopened on January 2…

Dozen more China FTZs a waste of effort

Posted to Far East Maritime (by Greg Knowler) on January 28, 2014

China will have 12 free trade zones, Beijing announced a couple of weeks ago. Interesting, considering that Shanghai can’t even explain exactly what its own highly publicised free trade zone will be doing. So far it is all hot air and hyperbole…

Funding dispute won’t derail Panama Canal project

Posted to Far East Maritime (by Greg Knowler) on January 24, 2014

There was too much to lose for the contractor handling the Panama Canal expansion project to quit the job, said Manual Benitez, the Panama Canal Authority (ACP) deputy administrator. “Nobody walks off a project this advanced,” Benitez said at the SMC3 Jump Start conference in Atlanta last week.

Rising wages keep China manufacturing moving

Posted to Far East Maritime (by Greg Knowler) on January 23, 2014

China’s wages are expected to increase by 10 percent or more this year, continuing a steadily rising trend that has seen workers’ earnings grow by almost 50 percent in the last three years. The impact of the growing payroll is being felt most…

Cosco saves its Shanghai spot

Posted to Far East Maritime (by Greg Knowler) on January 16, 2014

China Cosco said in a filing to the exchange yesterday that it has swung back into the black after two years of crippling losses, although it gave no figures. The latest numbers available show a January to September loss of US$330 million. Three…

Indonesia rolls out unwelcome mat to ore buyers

Posted to Far East Maritime (by Greg Knowler) on January 14, 2014

The beauty of mining bauxite is that it is almost always found close to the surface in horizontal layers and can be strip-mined. That saves bundles for mining companies that only have to scoop up the ore, crush and wash it and ship it off for processing.

Beijing promises clampdown on dodgy data

Posted to Far East Maritime (by Greg Knowler) on January 9, 2014

China’s economic claims have long tested the boundaries of reality, especially when it comes to GDP. The combined economic output of the provinces regularly exceeds the national GDP, and the discrepancy is sometimes breathtaking. In 2011, for example…

January demand an annual event, so why the surprise?

Posted to Far East Maritime (by Greg Knowler) on January 7, 2014

Freight rates have risen sharply on the Asia-Europe trade as container lines levy increases in the build up to Chinese new year. Those carriers that haven’t already raised rates will be doing so next week by US$500 per TEU in some cases. The…

From Nicaragua canal to Ukraine ports, developer is on a roll

Posted to Far East Maritime (by Greg Knowler) on December 19, 2013

While Ukraine digs itself deeper into political crisis, Beijing Interoceanic Canal Investment Management (BICIM) has been quietly getting on with business. The Wang-controlled BICIM has agreed to invest US$10 billion in the construction of a port and economic zone in Sevastopol…

Lumps of coal in Qinhuangdao port’s IPO stocking

Posted to Far East Maritime (by Greg Knowler) on December 17, 2013

When it comes to IPOs, timing is everything. Catch a wave of positive market sentiment and you are cooking with gas. But get swamped by negative sentiment and you are toast. Qinhuangdao Port's debut on the Hong Kong Exchange last week unfortunately…

Loss-making China Cosco lines reaches for its orderbook

Posted to Far East Maritime (by Greg Knowler) on December 12, 2013

China Cosco Holdings, the mainland’s flagship shipping company, hasn’t ordered ships for five years. But rather than being a shrewd strategy, it is the result of a couple of years generating GDP-sized losses. In 2011, the losses hit US$1.7 billion.

Inept and out of its depth, HK searches for consensus

Posted to Far East Maritime (by Greg Knowler) on December 5, 2013

Margaret Thatcher once said consensus was the absence of leadership. A way to avoid confronting the issues that needed solving. But for Hong Kong’s massively unpopular and increasingly schizophrenic government, the obsessive need to achieve consensus has become a business model.
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