Mitsui OSK Lines (MOL), Japan’s largest shipowner by fleet size, has issued a new business plan to cope with slashed world trade in the years ahead following the damage wrought to the global economy by the coronavirus.
MOL will reduce its holdings by 40 ships – equivalent to around 5% of its fleet – with tankers, bulkers and car carriers all set to be offloaded. The company is also planning to dispose of non-core assets including real estate as it prepares to get through one of its toughest periods in its 136-year history.
MOL has made forecasts for when various trades will return to pre-coronavirus 2019 levels and they make for sobering reading.
Seaborne trade of automobiles will recover to 2019 levels from 2023 or later, MOL is predicting while the global container cargo trade will bottom out in the third quarter this year with box trades set to plummet 25% year-on-year for 2020. MOL is forecasting the container sector will only get back to 2019 levels by 2022.
Cargo movements of raw materials for steel production will start to recover in 2021, but recovery to 2019 levels will likely take until 2022 or later, MOL stated, while adding that cargo movements of grain, which are based on food demand, are expected to be relatively steady.
MOL is predicting that the crude, product and LNG trades will just about have recovered to 2019 levels during the year 2022.
In forecasting megatrends for the post-Covid era, MOL’s world view from 2022 will see an acceleration of energy transition for all industries. MOL said its investment targets will change in step with this transition.
MOL is also anticipating a continued decrease in people and product movements to a lower mobility society as well as a review of supply chains in each nationʼs major industries, moving towards self-sufficiency, something that has been strongly espoused by Japan’s prime minister, Shinzo Abe.