Cosco anticipates 2017 earning will triple to US$205 million

    COSCO Shipping Development forecasts that its net profit for 2017 will triple to CNY1.3 billion (US$205.2 million), up from CNY368.6 million in 2016 when it completed a major restructuring exercise that involved the disposal of the then loss-making container shipping business.

    Deducting exceptional items, the results are even more impressive, with profit of CNY1.25 billion expected compared to the net loss of CNY1.64 billion previously, reported Colchester's Seatrade Maritime News.

    The group also highlighted that improvements in the global economy and the international shipping markets since the fourth quarter of 2016 has had a positive impact on the profitability of its container leasing and container manufacturing divisions. The group has holds a stake in China International Marine Containers and a container fleet of 3.65 million TEU.

    Cosco Shipping Development has been transformed from the container line arm of the China Shipping Group and - following its merger with Cosco - has emerged as the group's integrated financial services platform.

Japanese Big Three start new joint venture ONE in good financial shape

    Japanese shipping giant MOL declared a 34.9 per cent year-on-year's profit increase to JPY29.2 billion (US$267.07 million) drawn on revenues of JPY1.24 trillion, up 12.8 per cent.

    This may well be the second to last time Japan's Big Three container lines announce their financial results separately. On April 1 they will combine their container businesses into a new joint venture company called Ocean Network Express, to be know as ONE.

    In its containership division, MOL narrowed its segment loss from JPY26.1 billion in the first nine months of FY 2016 to JPY372 million year on year, despite segment revenues surging 21.1 per cent to JPY567.4 billion.

    "On the Asia-North America routes, demand continued to proceed firmly as cargo volumes from Asia reached a record high," MOL said of the results.

    "On the other hand, upward momentum with respect to spot freight market was limited, even during the busy summer season, as the supply and demand balance did not tighten due to increased vessel supply as a result of the deployment of new containerships, etc," said the company statement.

    "On Asia-Europe routes also, upward momentum with respect to spot freight rates was marginal despite the highest ever cargo volumes from Asia," the carrier said.

    "The backhaul cargo volumes from Europe to Asia have also increased since the beginning of the year, which led to a rise in the spot freight market and greatly contributed to route profitability."

    As reported here yesterday "K" Line, one of the Big Three Japanese ocean carriers also returned to profitability, having declared a net profit for the three quarters ending in December 31 of US$82.2 million, after a year-on-year loss of $54.5 million in 2016. Profit in 2017 was drawn on revenues of $7.8 billion, up 16 per cent.

    "K" Line container shipping revenues were up 20.1 per cent and accounted for nearly half the sales made in the nine-month period. with dry bulk shipping taking up most of the other half.

    NYK Line was also back in the black, declaring an operating profit for the three quarters ending in December 31 of JPY24.8 billion (US$228.3 million), after a year-on-year loss of JPY226.09 billion in 2016. Profit in 2017 was drawn on revenues of JPY1.6 billion, up 15.3 per cent.

Shenzhen's SF Express deploys drones in PLA military drills

    The People's Liberation Army of China (PLA) has enlisted private courier companies to participate in drills for emergency logistics missions by deploying civilian drones.

    Two drills were held in the provinces of Yunnan and Shaanxi to test the delivery of supplies to remote areas by drones.

    During the drill held in Yunnan, an SF Express drone was used to deliver urgently needed spare parts for a damaged radar located in a rugged mountainous region.

    The deliver took an hour, half the time it would have taken to make the delivery by truck, reported Singapore's OpenGov Asia which cited the South China Morning Post.

    The Shaanxi drill enacted a medical emergency, which required an SF Express drone to deliver antivenin to a victim. The mission took just 22 minutes to complete, as compared to the two hours it would have taken by road.

    The PLA told Hong Kong's South China Morning Post the expansion of the e-commerce industry in China has made drones cheaper and available for mass production.

    As a result, civilian drones are becoming a good source of backup for military logistics operations, even though they are often less accurate and have smaller carrying capacities compared to military drones.

    In October last year the PLA signed a deal with SF Express and four other non-military logistics companies to help modernise the logistics network of the country's air force.

    The companies are JD Logistics, Deppon Logistics, China Railway Express, and state courier China Postal Express & Logistics. This cooperation aims to address the manpower shortage in the PLA's logistics network.

    According to Reuters, the agreement would see cooperation between the PLA and SF Express over the next five years in the areas of goods transportation and warehouse management to improve the army's logistics network and aid air force combat. The private courier company added that it had set up a special division to handle the work.

(Source:HKSG-GROUP)

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