Apr 10 | 2020
An Interview with Chen Feng, General Director of Marketing and Sales Center
Breakbulk spoke with Chen Feng, general director of marketing and sales center, COSCO Shipping Specialized Carriers, about the company’s response to the Covid-19 pandemic, and the reboot of China’s supply chains.
Q: What is the impact of the pandemic to COSCO?
Beyond the short-term issues of understaffing and delays in loading and unloading, and clearing of backlogs once operations began to move again, the outbreak caused cargo owners to stop or reduce production. There are many export restrictions, which has resulted in voyage cancellations or delays. Although the car manufacturers have resumed work, spare parts supply has not been fully restored, so car transport has been delayed. Overall, production capacity is being increased and workers are working overtime to make up for the slowdown period.
Q: What new measures is COSCO considering or has already put in place?
Because the main impact of the pandemic is on trade and ports, there have been very limited responses available to shipping companies. But we are considering new strategies, such as allowing our ships, which are still overseas, to pick up third-country cargo to reduce the risk and losses associated with the outbreak.
Regarding capacity and route planning adjustment, in the past we have paid more attention to serving Chinese customers, relatively speaking. As we look forward, we will shift our focus to global capacity layout, and pay closer attention to tracking the development of the industry. As we all know, due to the Sino-U.S. China trade friction, production for many goods has been transferred to Southeast Asia and other countries, so we will consider the flow of goods to lay out and adjust capacity.
We will also change the traditional business operation thinking, focusing on providing customers with integrated logistics services. With the development of the industry, more and more customers want us to be able to provide integrated logistics services, that is, from providing a single "port-to-port" service to providing the entire "door-to-door" logistics services. We have made this a strategic priority: to become the world's leading shipping and engineering logistics service provider. The company has already accumulated some experience in providing door-to-door services, such as in some power plant projects along the Belt and Road.
Q: With new health and safety measures in place, how has COSCO complied and what impact have they had on operations?
COSCO has acted in accordance with international, national and local requirements as it relates to health and safety during this crisis. We have also prioritized timely communication with consignees, shippers and customers to obtain their understanding and support. So far we have not received any complaints, instead we have received several written customer tributes, including thanks for successfully delivering goods in time.
We have heard concerns around the implementation of IMO2020. Will you give us an update on how COSCO has complied with the new regulations?
As a world-class shipping company, we attach great importance to this new regulation. We prepared our fleet to be compliant by the end of last year. In fact, all our ships use very low sulfur fuel, (VLSFO 0.5 percent) and so far, we have done a good job of procuring it with no interruption in service.
Of course, this leads to an increase in operating costs and we hope that cargo owners can help us to bear some part of the new operating costs. At present, the relative acceptance by many customers is relatively good. Many large project cargo owners have expressed understanding and willingness to share a part of the additional costs, but a number of short-term cargo owners are not willing to bear the additional cost, especially during the outbreak because the market is oversupplied with vessels. However, we will continue to support IMO 2020 and remain compliant.
Visit COSCO Shipping Specialized Carriers Co. at Breakbulk Asia, Stand F20, and at Breakbulk Europe, Hall 5 5G10-H11