The CEO and president of Mitsui OSK Lines (MOL) has branded his new co-owned containerline’s financial results “shocking” and vowed to make big changes.
MOL has a 31% stake in Ocean Network Express (ONE), the new boxline launched with compatriots Nippon Yusen Kaisha (NYK) and Kawasaki Kisen Kaisha (K Line) in April this year.
A dire start to operations saw Singapore-based ONE forced to issue a warning last month that it could lose up to $600m in its first year of operations, far off its initial $110m profit forecast, on the back of “teething problems” with the consolidation of the three company’s liner divisions. The huge loss forced ONE’s three parents – including MOL – to issue their own profit warnings.
Speaking with local shipping outlet Kaiji Press in Tokyo this week, Junichiro Ikeda, in charge of MOL for the last three years, said of ONE’s profit downgrade: “I think that it is a shocking figure for investors and stakeholders as well as for us.”
Ikeda admitted it had taken ONE too long to respond to early service disruptions, which had resulted in losing the trust of customers.
“It took some time to address the confusion in our services and we lost the faith of our customers in the process,” Ikeda told the Kaiji Press. Nevertheless, the MOL boss vowed to bolster support for the fledgling line and felt the beneficial synergies from the merger were now becoming apparent.
In a release last month, ONE stated liftings and utilisation dropped in the first half of the financial year due to the impact of “teething problems” immediately after the commencement of services in April of this year. Booking reception and documentation operations were delayed when operations kicked off on April 1 because ONE staff were not completely familiarised with the newly introduced IT system, and the staff were “short-handed”.