Shanghai International Shipping Institute

OUTGOING chairman CC Tung of Orient Overseas (International) Limited believes the group's upcoming acquisition by Cosco Shipping and Shanghai International Port "offers tremendous opportunities both to OOIL and to the wider Cosco group."

Mr Tung was quoted as saying in a report by Fort Lauderdale's Maritime Executive: "Together with greater scale and with increased financial resources we will be able to combine the complementary strengths of our two liner businesses and Cosco's terminal business and thereby create an industry leader, providing the widest of networks and the best of service to our customers."
Hong Kong-based shipping and logistics company OOIL owns one of the world's largest international integrated container transport businesses, which trades under the name OOCL. As at June 30 the group had total liquid assets amounting to US$2.2 billion and total indebtedness of $4.2 billion. It posted a first half loss of $10.3 million.
OOIL incoming chairman Captain Xu Lirong was also positive: "Intensifying market competition, mergers and acquisitions in the global container industry have gathered momentum in recent years. This transaction is a common choice for both sides to follow the development trend of container shipping industry and realize sustainable development.
"I believe that after OOIL becomes a member of Cosco Shipping we can effectively combine the respective strengths of OOIL and Cosco Shipping Lines and optimise our global network, thereby achieving greater economies of scale and synergies."
Mr Tung was upbeat about industry growth and the slow and steady recovery that began in late 2016. "However, the financial results for the current reporting period reflect not only the positive growth story but also some of the significant challenges that we have been facing.
"Supply side growth continued at a significant pace, with total capacity levels remaining a risk factor in the future even if newbuilding deliveries look likely to reduce markedly in the coming two to three years.
"Increased costs have also hurt profitability: the higher price of oil has increased fuel costs and equipment repositioning costs have been amplified by the increasing imbalance between strong headhaul growth and stable to weakening backhaul growth."
During the first half of the year the group took delivery of the sixth and last of the 21,413 TEU series newbuild vessel from Samsung Heavy Industries in South Korea, the OOCL Indonesia. All six vessels of the 21,413 TEU series have been deployed in the Asia-Europe service.

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