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MOL to cut 40 vessels from its fleet due to virus as a “Defensive Measure”

PortandTerminal.com, June 23, 2020

MOL, Japan’s largest shipping company, will reduce its fleet by up to 40 vessels, equivalent to five percent, due to the coronavirus crisis | Don’t expect to see a recovery for the container sector until 2022.

MINATO CITY, JAPANMitsui OSK Lines (MOL), Japan’s largest shipowner by fleet size, has issued a new business plan with what they call “Defensive Measures” that will help the company cope with the impact of COVID-19 on their business.

One defensive measure they have announced is a dramatic cut to their fleet – a reduction of 40 ships, which is equivalent to around 5% of the line’s total fleet. The fleet cuts will affect tankers, bulkers and car carriers. The company is also planning to dispose of non-core assets including real estate as it prepares to get through one of the toughest periods in its 136-year history.

Global container cargo trade will hit bottom in July-September 2020. Trade throughout 2020 will decrease by around 25% from the previous year. Anticipate that trade will recover to near the 2019 level around 2022(MOL Business Plan, June 22, 2020)

MOL has made forecasts for when various trades will return to pre-coronavirus 2019 levels and the news is grim.

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.

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.

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