KUALA LUMPUR: MISC Bhd’s exit from the container liner business will be felt in the industry, given the group’s extensive network overseas.
MISC has offices and agents in 28 countries including Australia, Japan, Holland, New Zealand, Singapore, the UK, South Africa and the Middle East.
The closure of the group’s entire liner operations announced recently will have a major impact on its existing clientele, said industry observers.
According to sources, MISC Australia, which is solely in the container liner business, has sent out notices to its clients informing them to make the necessary arrangements for alternative shipping services.
In the notice, MISC Australia said its liner business will cease operations in Australia by the end of June 2012.
The liner industry has been hit by falling freight rates and overcapacity in the past few years, with players like Denmark’s Maersk Line, Japan’s Mitsui OSK Lines Ltd and Hong Kong’s Evergreen Line experiencing challenging operating conditions.
MISC’s liner business suffered a total financial loss of US$789 million (RM2.5 billion) over the past three financial years which had impacted the overall performance of the company.
The group expects to incur further losses in the current financial year ending Dec 31, 2011 as the expected one-off costs from exiting the liner business are estimated to be approximately US$400 million.
This article appeared in The Edge Financial Daily, December 7, 2011.
MISC has offices and agents in 28 countries including Australia, Japan, Holland, New Zealand, Singapore, the UK, South Africa and the Middle East.
The closure of the group’s entire liner operations announced recently will have a major impact on its existing clientele, said industry observers.
According to sources, MISC Australia, which is solely in the container liner business, has sent out notices to its clients informing them to make the necessary arrangements for alternative shipping services.
In the notice, MISC Australia said its liner business will cease operations in Australia by the end of June 2012.
The liner industry has been hit by falling freight rates and overcapacity in the past few years, with players like Denmark’s Maersk Line, Japan’s Mitsui OSK Lines Ltd and Hong Kong’s Evergreen Line experiencing challenging operating conditions.
MISC’s liner business suffered a total financial loss of US$789 million (RM2.5 billion) over the past three financial years which had impacted the overall performance of the company.
The group expects to incur further losses in the current financial year ending Dec 31, 2011 as the expected one-off costs from exiting the liner business are estimated to be approximately US$400 million.
This article appeared in The Edge Financial Daily, December 7, 2011.
