China Navigation (CNCo), one of the most venerable names in Asian shipping, is very much in a phase of expansion, with the keen backing of its chairman, Barnaby Swire, the sixth generation at the helm of the famous family conglomerate.
Singapore-based CNCo is the oldest part of the Swire empire, a diverse group with interests in property, retail, bottling and airlines in the form of Cathay Pacific. The shipping line installed James Woodrow as its managing director in 2015. He is presiding over a period of fleet expansion unparalleled in the company’s 146-year history, albeit a careful, niche-focused build-up.
“We are definitely in growth mode at the moment,” Woodrow tells Maritime CEO in an exclusive interview.
As well as well established South Pacific focused liner trades, CNCo diversified into the handy bulk sphere five years ago and has since doubled the size of its fleet each year. Today the fleet stands at 90 ships, of which 31 are owned.
Swire Bulk continues to expand its geographic footprint. Earlier this year it opened an office in Vancouver to add to its Pacific network offices in Singapore and Melbourne, while London and Miami serve as the line’s Atlantic offices, trades that Woodrow admits are still a “work in progress”.
The company’s bulk focus has been on the larger handy sizes – 38,000 or 39,000 dwt.
“If there are opportunities to own more ships and take long term charters then we will. It just depends on where the markets are at,” Woodrow says, as the CNCo fleet approaches triple figures.
However, growth at CNCo is very targeted – and is never just for the sake of swelling a balance sheet. Indeed, there is a sense Woodrow is relieved he is not beholden to keeping shareholders sweet.
“We’re not a public company so we do not have the pressure of reporting quarterlies that others do,” he says.
Perhaps it is this private, family-owned focus that has led CNCo to becoming a rare altruist among shipowners, a set of people better known – whether rightly or wrongly – for avarice. Famous across shipping for its commitment to the highest levels of training, CNCo has also recently been in the news for how it handles waste, both its own and others.
Woodrow is justifiably proud of how his company has recently recycled three ships in Alang in India to Hong Kong Convention compliant rules. The trio of ships took 95,000 working hours to dissemble and there were no injuries.
CNCo is a founder member of the recently launched Sustainable Shipping Initiative designed to create a more environmentally responsible, socially conscious, safer, accountable, and more economically profitable industry.
Just as commendable, in March CNCo signed a deal whereby its vessels will carry containers of recyclable waste from eligible Pacific island ports, pro bono, to be sustainably treated and recycled in suitable ports in Asia Pacific.
Twenty-one Pacific island countries who have insufficient or inappropriate landfill space to store waste, have inadequate waste treatment facilities, and the financial inability to ship recyclable waste are eligible for this opportunity provided by CNCo. The types of materials that are considered recyclable include plastics, aluminium cans, waste oil and ozone depleting substances.
CNCo’s bulker buildup has now coincided with a moment where the sector is finally moving upwards after a long recession, with Woodrow reckoning prospects for handies looking good this year and next, while looming environmental regulations could help keep a cap on the orderbook.
“With the 2020 IMO sulphur cap,” Woodrow says, “very few owners of smaller tonnage will invest in scrubbers so HFO prices will go up, which should mean fleet growth should slow down.”
On the liner side of the business the CNCo executive has no appetite to enter new tradelanes. “We’ll stick to our knitting,” he says, namely places such as Papua New Guinea and a host of islands in the South Pacific. “These are markets we know and where we can be competitive,” Woodrow says. “We have no dreams of entering the mainline trades, they are already overbooked.”
As with many of the past head honchos at CNCo, Woodrow has done his tour with Swire, working predominantly on the shipping side of the group’s business in Port Moresby, Hong Kong, Tokyo, Sydney and Auckland. Besides his shipping career, Woodrow also worked his way up to become cargo director at Cathay Pacific, an airline he spent eight years with. “Revenue management algorithms are so much more advanced,” he says of the airline business. Regardless, at the helm of CNCo, Woodrow is taking this Swire bastion to new heights.