The Ocean Network Express (ONE) will build on its international landside operations via container terminal joint venture (JV) with PSA in the carrier’s operating headquarters of Singapore.
Shipping lines in ONE — the merged container divisions of Japanese shipping groups NYK, MOL, and “K” Line — have terminal holdings in Asia, Europe, and Australia, and the new JV will give the carrier greater control of its volume in the busiest transshipment port in the region.
The JV at Pasir Panjang Terminal is scheduled to start operations in the first half of 2019 and will operate four container berths with a combined annual handling capacity of 4 million TEU. PSA wasn’t available to comment on the details on the shareholding structure of the terminal or the investment that will be made by each party.
Jeremy Nixon, ONE chief executive officer, said the JV would be a long-term strategic partnership with PSA that would allow the carrier to enhance its terminal and vessel planning operations.
“This will improve our service reliability and benefit our customers through better service levels,” Nixon said in a statement.
ONE has been struggling with poor service levels since its launch in April this year — with what the carrier has dubbed “teething problems” and some shipper customers have described as a “meltdown” — impacted bookings on its main Asia-North America and intra-Asia routes. This had a heavy impact on ONE’s profitability, and in its half-year earnings report released in October, the carrier revised downwards its earnings forecast.
ONE now collectively expects to lose $310 million in the first half of the year, on revenue of $5.03 billion, and has raised its full-year expected loss from $110 million to $600 million, with revenue of $11 billion.
This is despite the carrier regaining the trans-Pacific business it lost in its challenging spring merger of the operations of three Japanese carriers. ONE’s share of the US’s Asian import market rose to 15.4 percent from July to September, making it the top-ranked carrier on the market by volume, according to figures from PIERS, a sister product of JOC.com. In the previous quarter, ONE’s share of the trans-Pacific market at 13.9 percent fell to second behind CMA CGM/APL, down from the 15.8 percent market share at the start of the year, PIERS figures show.
ONE — a member of THE Alliance
ONE is a member of THE Alliance with Hapag-Lloyd and Yang Ming, and the carriers this week announced a review of shipping schedules for 2019 with the emphasis on improving service levels.
THE Alliance will deploy a fleet of more than 249 ships and connect 76 ports across its global network. “A necessary capacity upgrade to the existing Asia-Europe network and overall optimized port-pair connections will be implemented to accommodate customers’ needs of greater reliability and stability in service quality,” THE Alliance said in a statement.
Carrier members of the 2M Alliance, Maersk Line, and Mediterranean Shipping Co. also revealed new schedules for the Asia to North Europe and Mediterranean trades. Transit times will be extended from early March with Maersk cutting eight port calls in the network while deploying an additional six vessels across 10 Asia-Europe/Mediterranean strings.
MSC said it would phase in additional vessels to existing loops on the Asia-Europe trade to factor in port delays that the carrier expected to face in 2019.
“We can only assume that container terminal congestion at the main ports of the trade will continue to worsen, leading us to anticipate and incorporate longer time buffers in the schedule, in terms of port stays and speed at sea,” MSC said in its revised schedule announcement.
Europe’s two largest gateway ports of Rotterdam and Antwerp have experienced persistent barge congestion this year as the huge container exchanges from rising mega-ship calls overwhelm terminals. Both ports have introduced measures to ease the congestion, such as dedicated barge berths and barge scheduling, but with the enormous call sizes of the mega-ships, it remains to be seen how effective this will be.