Japanese shipping company Mitsui OSK Lines’ (MOL) CEO Junichiro Ikeda said that the company sees “few prospects for recovery” during 2016 due to China’s historically low levels for containership and dry bulker markets.
According to Ikeda, MOL continues to experience issues with fleet oversupply as the business climate remains severe.
“The drop in crude oil prices does provide a tailwind with the twin benefits of reducing bunker costs and spurring the tanker market.
“However, low crude prices also raise concerns of a slowdown in resource development, which could negatively impact our new LNG carrier and offshore business projects.
“In addition, we cannot realistically expect favorable conditions will go on forever in the tanker market,” Ikeda said in his New Year message.
Ikeda added that MOL should adapt to a changing business environment and develop a new work strategy.
“We must not be content to rely on methods that worked in the past…past experience does not guarantee our future success.”
Since MOL launched the midterm management plan STEER FOR 2020 in April 2014, the company increased its investment in LNG carrier and offshore businesses where it expects high growth and long-term stable profits.
“We are already seeing the results of efforts to transform our business portfolio and business model, two of the three innovative changes outlined in the plan. Our containership and dry bulkship operations continue to be battered by difficult market conditions, but ocean shipping companies are used to weathering rough seas,” Ikeda said.