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, shipowning and operating arm of the Swire group. It is also its oldest operating entity. CNCo was founded in 1872 to operate Mississippi-style paddle-steamers on China's Yangtze River. Since then the Company has expanded globally, with offices in 18 countries. CNCo is one of the oldest independent British shipping companies still managing its own tonnage in-house.
CNCo has its Operational Headquarters (OHQ) in Singapore where it is a registered company. This entity is in turn a wholly owned subsidiary of The China Navigation Company Limited, registered in London. Neither company is publicly quoted on any stock exchange. As seen from the Organisational and Operational Boundaries diagram, CNCo is also the parent company for a number of agencies and has branches and regional offices in American Samoa, Australia, Brazil, Canada, the Chinese mainland, Fiji, Germany, Hong Kong Special Administrative Region (HK SAR), India, Indonesia, New Caledonia, New Zealand, Papua New Guinea, Samoa, Taiwan region, the United Kingdom and the United States of America.
The Company operates a global network of multipurpose liner, dry bulk and bulk logistics services through its three business divisions: Swire Shipping, Swire Bulk, and Swire Bulk Logistics.
CNCo also owns a:
In 2019, CNCo acquired the bulk shipping business of Hamburg Süd which included Rudolf A. Oetker (RAO), Furness Withy (FW) Chartering and the bulk activities in Alianca Navegacão (Aliabulk). The bulk shipping business in Hamburg Süd operates from Hamburg, London, Melbourne and Rio de Janeiro, with a chartered fleet of approximately 45 vessels in the Handysize, Supra / Ultramax and Kamsarmax / Panamax segments. CNCo retained all the acquired offices and employees.
Pacifica Shipping ("Pacifica") is an operating division of The China Navigation Company New Zealand (NZ) Limited. Pacifica operates MV Moana Chief, a New Zealand-flagged coastal container vessel with a capacity of 1,700 TEU. CNCo also owns the New Zealand coastal cement carrier MV Aotearoa Chief. This vessel is operated by The China Navigation Company NZ Limited in a long-term partnership between CNCo and Golden Bay Cement, a division of Fletcher Building 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 in the United States to Tahiti, Tonga, Samoa and American Samoa and the wider Pacific. Polynesia Line operates two chartered-in vessels: MV Polynesia and MV Fesco Askold.
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 (plus short-term chartered-in vessels); the majority of which are modern multipurpose vessels owned by Swire Shipping's parent company, CNCo Pte Ltd, in Singapore.
In 2019 several key service developments were launched including a new premium container liner service from New Zealand to the South Pacific Islands, and an additional breakbulk service linking New Zealand with North Asian markets. Swire Shipping continued with its investment in the digital enhancement and modernisation of its systems, including the launch of a new e-commerce platform (https://swireshipping.com). In early 2020 Swire Shipping plans to launch the first of eight new container vessels. This will represent a generational investment in the largest and most environmentally friendly vessels in the region and material a long-term commitment to our key stakeholder communities in the Asia Pacific region.
Swire Bulk continued to build and develop its global dry bulk fleet. In April 2019 Swire Bulk completed the acquisition of the Bulk Shipping division of Hamburg Süd, accelerating its expansion into the Ultramax sector. This acquisition aligned with Swire Bulk's strategy to focus on modern fuel-efficient vessels which will allow it to continue to deliver environmentally responsible market-leading bulk solutions. In operating a modern and fuel efficient fleet, Swire Bulk has been able to transition smoothly through the implementation of the IMO 2020 regulations for significantly reduced Sulphur content in fuel oil, while retaining our competitive advantage.
At the end of 2019 the owned fleet consisted of 20 modern Swire B-Delta 39k deadweight tonnage (DWT) handysize bulk carriers and four Imabari designed 38k DWT log-carrying vessels. Eight new-build Oshima designed and built 37k DWT vessels, as well as two new-build Hakodate designed and built 34k DWT vessels are scheduled for delivery in 2020 and 2021. In addition to the owned fleet, the balance of operated tonnage has continued to transition towards the larger Supramax and Ultramax vessel sizes, facilitated by the acquisition of Hamburg Süd. The growth in this sector closely aligns with the freight demands of our core customer base and their evolving freight requirements. In 2019 Swire Bulk grew to owning, managing and operating an average of 115 vessels at any one time and the opening of new offices in Hamburg and Rio di Janeiro, bringing the total number of offices globally to nine. These offices, and those located in London, Melbourne, Miami, Shanghai, Singapore, Tokyo and Vancouver, enabled Swire Bulk to offer geographical and timezone coverage around the world.
Vessels / Fleet
Our core-owned Handy Fleet will grow with the new-build deliveries scheduled for 2020 and 2021. Beyond this investment there are no further plans to look at additional acquisitions at this stage. The strategy for the business is to continue to build a core modern, eco-design fleet from Japanese owners where there is a focus on quality and performance. This is aligned with Swire Bulk's aims for low emissions and improved efficiencies across the operating business.
People / Places
Swire Bulk's global, shore-based headcount grew from 60 to 112; with employees joining from Hamburg Süd, following the former's acquisition. Offices in London and Melbourne were merged while the teams in Hamburg and Rio di Janeiro added to Swire Bulk's global network. The regional offices have balanced and diversified teams to optimise commercial activities in their respective areas. In a heavily fragmented commodity market, this global presence offers operational support across all time zones and allows Swire Bulk to provide a proactive and dynamic service to all our customers, with the primary commitment to Zero Harm.
Customer development
In 2019, Swire Bulk consolidated its position as a leading global freight provider in the geared vessel sector. The growing diversification of commodities, customers and trade routes continued as Swire Bulk partnered with customers to provide solutions beyond freight. While retaining focus on sustainably sourced logs, grains and minerals, support for renewable energy grew through the carriage of such as windmill blades and the agreement of long-term contracts for the carriage of wood pellets into Japan in the next decade. Across all global offices, the Commercial team has been focusing on core customers and becoming their Partner of Choice, with the primary focus on more efficient trading triangulations to reduce ballast days across the fleet. This has been successfully executed and has resulted in reduction of the six-month rolling Energy Efficiency Operational Indicator (EEOI) average of our entire bulk fleet (click here to view EEOI table).
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, such as through floating transshipment 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, it offers horizontally integrated services and a global network to provide innovative and sustainable marine supply chain solutions for our customers through long-term partnerships. In 2019, the Swire Bulk Logistics operations and responsibilities were divided between Swire Bulk and Swire Shipping operating divisions and going forward we will not be reporting on it as a separate division.
MBSS in which CNCo holds 25% shares in Indonesia, is being managed solely from Indonesia. In 2019, MBSS management took steps to bring operations up to international standards by improving planning and coordination and setting common metrics as goals to deliver gains in efficiency. MBSS's management also increased investment in training and development, with a strong focus on safety training, and began the journey of digitising both operations and training where appropriate.
More information about MBSS can be found in their Annual Report for 2019.
