🤝 Ocean Network Express (ONE), the sixth-largest global and Japan’s leading container shipping company, has joined hands with CJ Logistics (CJL), South Korea’s top third-party logistics provider, in a recent collaboration agreement.
📦 The primary goal of this partnership is twofold: ONE aims to increase its freight volume by leveraging CJL’s extensive service network, while CJL seeks to gain access to competitive shipping rates.
🌏 Recognizing the importance of stabilizing container cargo volumes in the Asian market, both companies have decided to work together in developing comprehensive sea-to-land transportation services, offering various end-to-end value-added solutions.
📈 In addition to this collaboration, CJL is actively seeking more partnerships with THE Alliance, of which ONE is a member. Just last month, CJL signed a similar agreement with another member of THE Alliance, Evergreen Marine Corp. This highlights CJL’s successful establishment of collaborations with two major shipping alliances.
💼 Under the previous agreement with Evergreen Marine Corp, CJL is committed to providing competitive shipping rates and container space for cargo traveling from Asia to the United States and Europe. Furthermore, both companies have agreed to expand container cargo volumes between the Far East and Southeast Asia markets through joint sales efforts and the co-development of end-to-end services.
🗣 A spokesperson from CJL emphasized that this collaboration offers an excellent opportunity for smaller shipping companies with limited capital to expand their business scope, leading to mutual benefits and complementary advantages.
💰 On July 31st, ONE released its financial performance report for the first quarter of the 2023 fiscal year (April 1 to June 30). During this period, ONE’s operating revenue amounted to $3.765 billion, experiencing a 58% YoY decline. The EBITDA stood at $770 million, marking an 87% YoY decline, while the net profit after tax was $513 million, showcasing a 91% YoY decline. Additionally, ONE’s cargo volume totaled 2.825 million TEUs, signifying a 4% YoY decrease.
📉 ONE attributes the decline in performance to two primary factors: Firstly, there was a notable reduction in global freight demand from April to June 2023 compared to the same period in the previous year, exacerbated by stagnation in retail consumption in Europe and the United States due to inflation. Secondly, with the easing of port congestion, the market’s shipping capacity has increased, causing a significant supply-demand imbalance.
🔮 Looking ahead, ONE anticipates substantial changes in the shipping market following the impact of the COVID-19 pandemic, particularly influenced by heightened geopolitical tensions, leading to shifts in consumer behavior and trade patterns.
📈 In response to the challenges, ONE has laid out measures to enhance profitability. These include expanding port coverage, reducing fuel consumption through slower sailing speeds, early deployment of larger vessels on East-West routes, and improving overall operational efficiency.
💪 The collaboration with CJL marks a significant step for ONE to expand its sources of cargo. It also emphasizes the growing trend of larger shipping companies and freight forwarders coming together to face market challenges during periods of downturn.
Stay tuned for more updates on this dynamic partnership! 🌐