Imbalances in the trades with disproportionately higher growth rates in headhaul led to a 22% spike in box repositioning costs while bunker costs also rose 19%. This offset a 6% rise in liftings and 3% rise in revenue per teu in the first half.
The new management team, lead by incoming ceo Huang Xiaowen and assisted by co-ceo Wang Haimin and former ceo Andy Tung, who will stay on for another year as co-ceo to help with the handover, emphasised the two companies would continue to maintain high operating standards and service and leading IT capability. Using the tagline “Trust Together”, they aim to combine the strengths of the two lines to optimise networks and increase synergies on the backend.
Working groups to identify synergies in network optimisation, joint procurement, IT and equipment utilisation have been formed. Earlier it was announced that OOCL directors Yao Erxin, Stephen Ng and Steve Siu had been appointed as vice-presidents of procurement, commercial coordination and the cio respectively at Cosco Shipping Holdings. They will concurrently hold their present OOCL roles as corporate planning and administration director, trades director and cio respectively.
Huang said this meant expanding routes according to jointly set targets while maximising network efficiency, especially on the Asia-Europe trades. Aware that combined capacity will jump to almost 3m teu Huang confirmed that some of the older tonnage will disposed of, especially those in the under 5,000 teu range.
Looking ahead, deputy cfo Michael Fitzgerald acknowledged that any potential trade war would not be helpful and remained a concern. However management noted that there has been limited, if any impact and concerns about an early peak to the high season due to front-loaded inventory building appear unfounded with still low recent US inventories and continued strong third quarter bookings and demand.