Ladies and gentlemen,
Good morning and a warm welcome to everyone.
We have gathered here at a time of uncertainty, both on the geo-political and the macro-economic fronts. In fact, if I were to take the pessimistic view of “the glass half-empty view “, I would suggest that we are in for some difficult times ahead, not just in the short but also the medium term.
The half empty or half full glass was last mentioned during the 9th global meeting in Bangkok.
At the forefront of my concern is the reduction of LCL cargo volume seen this year.
While generally characterised as a result due to trade tensions among the two biggest economies, I am however more worried that the differences are due to the changes in the mode of cargo mobility.
The FCL rates are low and it makes more commercial sense for the exporters and the forwarders to send the shipment as FCL instead of LCL, if the shipment is more than 8 to 10 cbm.
Also, the choice of changing a different trade route resulting in traditional ports losing its significance.
Plus, the growing influence of e-commerce business encroaching into the traditional consolidation practise. The mode of the B2B mobility model. At the moment such model is contained within limited market but, may see the expansion in time to come.
As the changes are affecting our consolidation behaviour, we could in fact be heading for a new way of agency co-operations in order to keep our business financially viable. Changing the way, we all do our businesses by adapting to the changing requirements of the customers should be our focus. We have to work out the best possible solutions for our customers if we have to stay relevant in our business.
C P World’s success has come in an environment of organisational service stability and an ability to come to a good agreement with all partners and we trust that, we would get your whole hearted support going forward.
The second concern would have to be the slowdown in the global economy. This is a concern I flagged a couple of years ago.
A global slowdown will clearly pose challenges since our business is all about connecting cargo around the world.
The impact of the slowdown is already felt in the smaller economy countries in South East Asia. This is evident with the grave challenge of having weekly sailing to all major ports.
Our consolidations services are now further hampered by trade related regulatory. The many customs and health authority control measures have been an added pressure on operations team. This has further weighed down by uncertainties in the external environment.
The silver lining is that co-loaders and customers alike are taking a more serious note and therefore complying with regulations.
Fortunately for this gathering, I am an optimist at heart… so I can take recourse to the “glass half full” view instead of the half empty one!
We are embarking on building more local capabilities to ensure we expand our relevance to our partners and clients alike.
Yesterday, my subject with team C P World was “Let’s work the Future”. We all need to capture the spirit right now. The spirit needed to meet the huge challenges our kind of business faces. At C P World, we must turn those challenges into opportunities. And we must do it the right way.
We seek answers and commitment from our staff of all ages, nationalities and backgrounds.
I would like to move on now to give you an insight into how our organisation is seeking to make further progress in the consolidations business.
We will do this on the basis that both origin and destination including the transhipment hub evolve together. This is because the demands are greater today and no business can survive unless we provide and sell a service that customer need and will purchase.
It is also about us being a responsible carrier.
All in all, I am confident that C P World Group can hold its own even against new competitors, with one caveat, we must continue to work hard and give our best.
I am encouraged that we continue to stay focussed on our principal stakeholders, our partners, customers and employees.
Every year, I had pointed to challenges such as identifying new avenues of growth, opening up new trade lanes, the responsible use of data and the need for thoughtful regulation and cementing our partnerships to ensure the network had a path forward.
I am pleased that on my watch, we have been able to negotiate the terrain with some success. More success would be welcomed.
But the challenges haven’t gone away. In some ways, they loom larger than ever.
The volumes have been greatly affected in and out of South East Asia compared to Indian sub- continent and Middle East and hence Ken has to work harder than me and steer the group thru the choppy waters. I am very sure Ken has the ability to do so and he will definitely come up with his best to ensure that the group over comes this phase.
Before I close, I would like to take this opportunity to thank our exceptional leadership team that has helped Ken and myself to steer the organisation through the past several years and support our initiatives.
My thanks to all the offices and network partners for your energy and commitment to make this network an ongoing success.
Thank you and have another wonderful meeting.