if you are not from the shipping industry, better read up before talking about it
NOL bought APL in 1997. And made lots of profit in most years other than 1998 due to the asian financial crisis.
NOL was sold to CMA in 2016 due to many years of under investment and mismanagement.
CMA was able to turn things around within 2 years of buying APL
It was not due to under investment ...it was due to oversupply.....the more ships u own ....the more losses u make everyday .....with freight rate going down....every trip u make is a loss...
The more trip u make ....the more losses u gana....
The 2016 shjipping crisis, also known as the "container shipping industry's annus horribilis," was largely caused by a combination of factors, including a global trade slowdown, oversupply of ships, and the bankruptcy of Hanjin Shipping. This led to significant losses for the industry, with container lines losing an estimated $10 billion in 2016. The crisis also saw a dramatic drop in freight rates, forcing many shipping companies to cut costs or seek alliances.
Key Aspects of the 2016 Shipping Crisis:
Hanjin Shipping Bankruptcy:
The bankruptcy of Hanjin Shipping, the world's seventh-largest container shipping company, in August 2016, was a major catalyst for the crisis. This left 66 of its ships carrying goods worth US$14.5 billion stranded at sea, disrupting supply chains and causing significant losses.
Global Trade Slowdown:
A slowdown in global trade, coupled with an oversupply of shipping capacity, contributed to the decline in freight rates and profitability.
Excess Capacity:
The industry had seen a surge in the construction of large container ships, which, while intended to improve efficiency, ultimately led to an oversupply and fierce competition that drove down prices.
Falling Freight Rates:
Freight rates for container shipping plummeted, with some analysts reporting a 50% decline in the cost of sending a container from Shanghai to Europe.
Industry Responses:
To cope with the crisis, shipping companies implemented various strategies, including mergers, acquisitions, and re-alignment strategies to optimize capacity and expand geographic coverage.