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PIL gains an advantage by being 'alliance neutral': SS Teo

PIL gains an advantage by being 'alliance neutral': SS Teo
Pacific International Lines (PIL) boss SS Teo says that being “alliance neutral” gives it the advantage of flexibility as it remains one of the few major container lines that is truly independent.

Singapore-headquartered PIL will have a capacity of 500,000 teu once its current fleet expansion is completed, and combined with the ongoing mergers and acquisitions in the container shipping sector, will become the ninth largest container line globally.

Despite this ranking PIL still remains very focused on niche trades in the Asia, the Middle East and Africa, with only a minor presence in the east – west trades, and it is not part the major container shipping alliances.

“Not being in any alliance doesn’t disadvantage us, in fact we invented a word called alliance neutral,” Teo, md of PIL, told the Marine Money Asia conference in Singapore on Tuesday.

He noted that alliance members were free to work outside the grouping where the alliance could not provide the service an individual member line requires. As a result PIL works with Wan Hai Lines in South and Southeast Asia, Wan Hai and Cosco to the transpacific west coast, Yang Ming Line to the Persian Gulf, and Cosco to West Africa.

“So in fact we are able to go to each individual alliance member to offer the best possible service,” Teo said. “I think having that position gives us a lot of flexibility in fact gives us the member to work with different members in different alliances.”

Given the company’s close longstanding, relationship with Cosco and its position as one of the few remaining mid-sized lines there has been speculation, that much like similar sized Orient Overseas Container Line (OOCL) it too could be bought by Cosco.

“There are rumours they are buying us – no we are not selling,” Teo stated.

However, the two companies enjoy good cooperation as was demonstrated by a recent swap of six vessels from each company, and Teo said the possibility of joint procurement of bunkers in South Asia.

“So I think as shipping line we are very ambitious to grow, and we are a very small shipping line and we hope just that we can grow together as we expand,” he said.

As Singapore’s sole container line following the sale of Neptune Orient Lines (NOL) to CMA CGM last year Teo also sees PIL as flying the flag for Singapore internationally.

“With what has happened in the last few years we call ourselves the iconic carrier of Singapore,” Teo said.

On remaining independent he concluded: “With the market recovery over the next two to three years I can create better value for the company, for my shareholders and a better standard of living for my colleagues - and that is very important.”

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