The first half of the year saw a slight improvement in our shipping volume. However, freight rates remained depressed due to over-capacity amidst slower global trade growth.
As we stepped into
the traditional peak season in second half of the year, we are seeing an
overall increase in business volume.
Freight rates in most of the trade lanes have also gradually recovered
to a more feasible level.
To progress along the One Belt, One Road (OBOR) initiatives of China, we have been actively participating in the third Singapore-China G to G project in Chongqing. Together with our investment in Guangxi, we are working on establishing a logistic network to better serve the south western region of China. We are also co-operating with a few major Chinese State Owned Enterprises on their OBOR business development and expansion.
We signed a Memorandum of Understanding in June with Industrial & Commercial Bank of China (ICBC), Singapore Branch and ICBC Financial Leasing, China to strengthen further our existing partnership with these institutions in shipping related financial products and services.
On IT development, we are glad that the Liner Management System (LMS) is progressing well according to plan and it will go live by March 2017. The integrated LMS with the industry's best practices would definitely assist us to improve the company's performance. We appreciate the determination and tireless effort of colleagues to push for its successful implementation.
On business side, we continue to take steps to streamline our operation to reduce our system cost. We have since confirmed the option to purchase the additional 4 x 11,800 teus ships, increasing our order to 12 ships in total. Financing of all 12 ships have been finalised and fully executed. Once delivered in 2017-2018, these ships would give us competitive cost advantage in their designated trade lanes, including US East Coast via the new expanded Panama Canal, beside our other traditional trading areas.
We expect the market to be relatively stable as compared to the first half of 2016. Nevertheless, we need the teamwork of all colleagues to diligently manage our cost and deliver a quality service to our customers.
The company will continue to develop our human capital through various relevant training courses including the QPM (Quality and Productivity Mindset) workshops. We encourage all colleagues to practice QPM in their daily work and contribute ideas to improve the company's processes for better performance and making the company a better workplace. We have also handsome rewards for selected ideas contributed to AIM!, our staff suggestion scheme. All Improvement Matters!
Finally, I like to thank all our stakeholders and colleagues for your unwavering support.
S. S. Teo