Shipbuilders turn to chartering for more revenue; spelling more jobs for seafarers
Big cargo owners like Home Depot and Walmart announced plans to have their own vessels to sustain worldwide inventories. Taiwanese shipbuilder, CSBC Corporation announced its plans to acquire a build-and-lease business, focusing on large cargo ships to improve its earnings. What does it mean for seafarers?
Entry into chartering
CSBC Chairman Cheng Wen Lon revealed the new strategy recently as the firm announced a $1.94 million net profit for 1H 2021 – emerging from being in the red between 2017 and 2020 due to stiff competition for newbuilding orders. The poor performance resulted in Cheng’s major salary cut last year, opting for the company’s minimum monthly wage of $810 until profitability was restored.
When a shipbuilder decides to expand its footprints by getting into the chartering business, it spells more than just enthusiasm to improve earnings. Manning agencies who are sharp enough may realise the shipbuilder is another client acquisition opportunity. Moreover, CSBC’s improved performance in H1 2021 does not mean the company is out of the woods.
With the current port congestions and unkind weather conditions, CSBC’s new venture would depend substantially on how it manages its chartering arm. As it is, port congestions have been intensively milked for profits. Loadings and surcharges at this point have proven to be the worst decisions ever; resulting in strained relationships with cargo owners, and authorities’ intervention demanding the shipowners explain themselves. Reports of high earnings before interests and taxes were less than welcoming.
Mitigate manpower shortage
Seafarers can heave a sigh of relief if they have been having trouble searching for assignments, given manpower shortage is a current global issue. Assuming the shipping crisis does not improve till at least in H1 2022, CSBC would be expected to remain conservative in its new venture. CSBC’s entry into chartering would provide seafarers another avenue for employment. From a macro perspective, cargo owners are the paymasters.
Crewing Online News Team
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