Strong organisational governance is the key to operating a socially responsible organisation. CNCo’s policies, procedures and governance structures ensure accuracy, consistency, risk management and responsiveness to key stakeholders including customers, shareholders and regulators.
The China Navigation Company Pte Ltd (CNCo) is the wholly owned deep-sea ship-owning and operating arm – and oldest operational entity – of the Swire group. CNCo was founded in 1872 to operate Mississippi-style paddle-steamers on China’s Yangtze River. Since then the Company has expanded globally. CNCo is one of the oldest independent British shipping companies still managing its own tonnage in-house.
CNCo is a Singapore-registered company and is a wholly-owned subsidiary of The China Navigation Company Limited, registered in London. Neither company is publicly quoted on any stock exchange. As can be seen from the Organisational and Operational Boundaries diagram, The China Navigation Company Limited is also the parent company for a number of agencies and has branches and regional offices in Australia, Canada, China, Fiji, Hong Kong, India, Indonesia, New Caledonia, New Zealand, Papua New Guinea, Samoa, American Samoa, Taiwan, United Kingdom and United States of America.
CNCo also owns:
Pacifica Shipping (“Pacifica”) is an operating division of The China Navigation Company New Zealand (NZ) Limited. Pacifica operates MV Spirit of Canterbury, a New Zealand-flagged coastal container ship. CNCo also owns the New Zealand coastal cement carrier MV Aotearoa Chief; this is operated by The China Navigation Company NZ Limited.
Polynesia Line Ltd. (“Polynesia Line”) is owned by CNCo. Polynesia Line operates a shipping network from the US west coast to the Pacific Islands, offering a fortnightly service from Los Angeles and Oakland to Tahiti, Tonga, Samoa and American Samoa and the wider Pacific. Polynesia Line operates two chartered-in vessels: MV Polynesia and MV Cap Taputapu.
CNCo is a trade enabler that has developed its marine service capability to provide market leading sustainable solutions for its customers and communities.
The Company operates a global network of multipurpose liner, dry bulk and bulk logistics services through its three business divisions: Swire Bulk, Swire Bulk Logistics and Swire Shipping. For the list of owned and operated vessels please click here.
As a liner shipping specialist with a principal focus on the Asia Pacific region, Swire Shipping has an unrivalled reputation for service, operational excellence and reliability, and is equipped to handle breakbulk, containerised, project, refrigerated and bulk cargoes, connecting over 400 ports globally.
It maintains a worldwide agency network in addition to its own representative offices across Asia, Australia, New Zealand, Papua New Guinea, the Pacific Islands, North America and Europe, providing its customers with dedicated service and expert market knowledge. Swire Shipping operates 29 vessels, the majority of which are modern multipurpose vessels owned by Swire Shipping’s parent company, CNCo Pte Ltd, in Singapore.
Divisional update: Swire Shipping
In 2018, several key service developments were launched.
Swire Shipping launched the first weekly shipping service directly connecting North Asia with the South Pacific. At the same time, the frequency of services from North Asia to Papua New Guinea was improved to a market-leading 10 days. New offices were opened in American Samoa, and Swire Shipping also embarked on an exciting digital transformation plan which is intended to “Save Our Customers Time” in all areas of their business.
Swire Bulk continues to build and develop its global dry bulk fleet. The focus remains on modern fuel-efficient vessels that will allow the business to deliver a first-class service to our Commercial customer base. With new regulations such as IMO 2020, Swire Bulk will be well-positioned to provide a competitive service that will also offer flexibility and a consistent technical standard to perform against our Contracts of Affreightment.
At the end of 2018, the Swire Bulk-owned fleet consisted of 24 modern Swire B.Delta39 deadweight tonnage (DWT) handysize bulk carriers, four Imabari 38K DWT loggers, and two Green Dolphin 38K DWT (which were under negotiation for a sale and leaseback deal). The balance of the operated fleet has seen a gradual shift into the larger Supramax and Ultramax vessel sizes that closely aligns with the freight requirements of our core customers. In 2018, Swire Bulk traded an average of 95 vessels at any one time and was represented in seven offices (London, Melbourne, Miami, Shanghai, Singapore, Tokyo and Vancouver) giving global 24 x 7 service.
Divisional update: Swire Bulk
Vessels / Fleet
Following the completion of negotiations for eight new Oshima 37K DWT vessels and two Hakodate 34K DWT vessels in 2017 there are no plans to look at further acquisitions at this juncture. The strategy for the business is to continue to build a core eco-performance fleet from close Japanese Owners where there is a focus on quality and performance. This is aligned with Swire Bulk’s aspirations for low emissions and improved efficiencies across the operating business.
People / Places
Swire Bulk’s shore-based team increased in 2018 from 42 to 60 employees, making it a 43% increase. This expansion was in part due to the requirement to have adequate resources to trade a fleet of up to 120 vessels, in line with our strategic forecast by the end of 2020. However, there have also been key governance roles added to focus on business performance, risk management and counterparty risk initiatives. The regional offices now have balanced and diversified teams to optimise commercial activities in their respective areas. In what is a heavily fragmented commodity market, this global presence is critical for real-time operational support across all time zones, and allows Swire Bulk to provide a proactive and dynamic service provision to all our customer, focusing on “Safety First”.
In 2018, Swire Bulk developed into a global freight provider with greater diversification across trading regions, customer accounts and able to support a larger range of commodities. The core fleet of Handymax loggers remains an integral part of the business with new origins for sustainable logs emanating from locations such as Uruguay. Across all seven global offices, the Commercial team has been focusing on our core customers with the primary focus to develop the backhaul trades in order to develop more efficient trading triangulations and reduce the ballast days across the fleet.
To date this has been successfully executed and the results have shown in the reduction of the six-month rolling Energy Efficiency Operational Index (EEOI) average of our entire bulk fleet.
Swire Bulk Logistics is the industrial shipping division of CNCo. Deploying purpose-built vessels, Swire Bulk Logistics specialises in the handling of dry bulk materials at sea, through floating transhipment vessels, and intermediate supply chain solutions to provide value-added services for our customers in the Asia-Pacific region. Working together with Swire Bulk and Swire Shipping, the division offers horizontally-integrated services and a global network to provide innovative and sustainable marine supply chain solutions for our customers through long-term partnerships.
Swire Bulk Logistics owns and operates a purpose-built cement carrier, MV Aotearoa Chief, in New Zealand, in a long-term partnership between CNCo and Golden Bay Cement, a division of Fletcher Building Limited.
Divisional update: Swire Bulk Logistics
MV Aotearoa Chief, the only cement carrier in CNCo’s fleet, on charter to Golden Bay Cement from December 2016, continued to operate successfully all throughout 2018. The vessel has a carrying capacity of 9,000 tonnes (the equivalent of, and resulting in), over 350 road tankers being taken off the roads on each voyage. It also incorporates the latest technology in electronic engine management, providing optimum fuel efficiency and low emissions.
In Indonesia, the price of thermal coal strengthened in the first part of 2018, mostly driven by China’s demand. Indonesian coal producers increased their production to 485 million tonnes (MT) in 2018, of which 121 MT are for domestic consumption and 364 MT is for export*.
MBSS (CNCo holds 25% shares in MBSS in Indonesia) transported a total of 33.9 million MT of coal in 2018; an increase of 24.7% from 2017. MBSS focus in 2018 has been on the optimisation of fleet management to improve human capital capabilities, operational scheduling and fuel efficiency with a reduction of 13.8% of fuel used compared to 2017.
MBSS recognises its dependence on coal and that its business model has always been coal-centric. MBSS management is committed to diversifying its activities into other commodities. The first step to diversification was done in 2017, by employing six tug and barge sets for the carriage of nickel ore.
In MBSS, safety continues to be the top priority and an on-going journey. In 2018 MBSS achieved a new safety record with 3.8 million Lost Time Injury (LTI) free manhours. MBSS successfully achieved in 2018 accreditation in ISO 9001:2015, ISO 14001:2015 and OHSAS 18001, showing a commitment to continuous improvement in the areas of quality, environment and safety.