Thursday, September 25, 2014
Cosco adds fuel-efficient ships to revive profits
China Cosco Holdings Co., which posted three consecutive annual operating losses, said that adding more fuel-efficient vessels will help it beat overcapacity, allowing the company to cut enough costs to revive profitability.
"The ships need to be filled for the cost savings to be achieved," said Guo Huawei, board secretary, in a Sept. 19 interview. He said operating larger carriers could be "a double-edged sword," as he declined to give an estimate for earnings or estimate when the company would likely turn a profit.
Cosco has ordered five fuel-efficient 14,500-TEU container ships for delivery between 2017 and 2018. The ships are a bit smaller than the industry’s largest 19,100-TEU mega-vessels on order by carriers such as Maersk Line and China Shipping Container Lines Co., which are betting on economies of scale.
Cosco’s container arm decreased fuel spending by 18 percent in the first half of the year through slow sailing, according to the company’s first-half earnings statement.
"Most of us thought the market would have improved considerably by now, but we have still the same overcapacity concerns today," said Guo. "It’s unclear when this will end. Under these circumstances, reducing costs is the most realistic strategy."
For more of the Bloomberg story: www.businessweek.com
More Newswire stories
Maersk Line ramps up cost cutting to offset low freight rates
ICS: Global shipping emissions down 20 percent
Saltchuk completes acquisition of Tropical Shipping
Cargo ship rescues 55 from Libyan waters
Home | The Magazine | Conferences | Port Handbooks | Newswire | Advertise | Ocean Schedules | Contact
CBN Archives | About CBN | Subscribe to CBN | Marine Fuels Conference | Southeast Freight Conference | Heartland Shippers’ Conference | Port Productivity Conference | Pacific Northwest Ports Handbook
Golden Gates Ports Handbook | Southern California Ports Handbook | Buy Handbooks | Subscirbe to Newswire | Newswire Archives | Upload Files