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APL launches integrated China-US logistics/liner service

APL launches integrated China-US logistics/liner service

Singapore: As parent NOL posted reduced results for both its liner and logistics activities, APL has unveiled a radical new China-US 'OceanGuaranteed' service designed to maximise synergies between the two. 

NOL (Neptune Orient Lines) Group reported net profit of US$187m for the first half of 2006, down 52% from 1H 2005, while second quarter net profit was US$67m. 66% lower than 2Q 2005. Chairman Cheng Wai Keung commented that after record financial performances in the past three years, NOL now found itself in a 'more challenging' business environment for both liner and logistics.

In the liner sector freight rates have softened but NOL says its cost management efforts continue, mitigating the cost pressures from high fuel prices. It expects the more difficult environment to continue over the next 12 months, the freight rate outlook largely depending on 'whether the strong demand seen in the first half continues and the extent to which it keeps pace with expected supply.'

Ron Widdows, ceo of APL, said the liner unit's strategy was to focus on 'keeping our network tight, working our assets hard and growing capacity sensibly, and largely in line with the market.' The company has 32 newbuildings on order for delivery during the next four years, with four arriving in 2006, and Widdows indicated that more orders could be placed.

Meanwhile, wider Group strategy continues to be the alignment of liner and logistics activities, and in this connection an important new China-US initiative has been launched, APL Logistics, in cooperation with Conway Freight of the US, is to operate an 'OceanGuaranteed' service designed to provide secure, rapid delivery of less-than-container load (LCL) shipments from Shanghai, Shenzhen and Hong Kong to main destinations in the US. Shipments, competitively priced according to weight, will receive priority loading on APL vessels and any that fail to meet the specified delivery-day will receive a 20% discount.  [15/08/06]