OOCL to go mega after no M&A luck turned up in downturn

HONG KONG's OOCL is planning to place orders "soon" for a number of mega ships in the 13,000 TEU range to rebuild capacity as there is little hope of making easy acquisitions now that the global downturn is over.


The carrier delayed placing new orders before because it was waiting to see if it could merge with or acquire another carrier during the recession, said OOCL chairman and chief executive CC Tung.


Mr Tung told Newark's Journal of Commerce that he had delayed ordering ships because he expected acquisition opportunities would appear in the course of the downturn.


To his surprise nothing did, and he does not expect anything to emerge now as the recession recedes into memory. "The period for consolidation is over," he said.


Now that OOCL has slipped to the middle of major box carriers, he now wants to order ships to rebuild capacity.


With bunker fuel prices rising over US$600 a tonne, OOCL plans to place an order for megaships "soon" to cut slot costs. "Bunker costs accounted for 25 per cent of OOCL's operating costs in 2010," Mr Tung said.
(Source:http://www.schednet.com)