Ocean Network Express (ONE) is looking to strengthen its service coverage and networks in 2024 amid current industry challenges.
Jeremy Nixon, chief executive officer of ONE, said the most dominant factor now impacting liner markets is the recent hostilities in the Middle East which has led to an industry pullback in Suez routing and longer steaming diversions via the Cape of Good Hope.
"This will have a material impact on both transit times and the ability to maintain weekly sailing frequencies on the Asia-Europe and Asia-USEC trades over the next quarter," he said.
"The regional political and military situation continues to be of concern, and we are monitoring developments very closely to minimize risks to our seafarers, customers' cargo and operational assets," Nixon added.
Operational considerations
The ONE chief executive said in addition to the Red Sea, the shipping line is also closely monitoring developments at the Panama Canal due to a prolonged drought.
"Despite the unpredictability of the global supply chain, ONE is continuously working to strengthen its service coverage and networks," Nixon said.
As of the end of December, ONE noted that all our six state-of-the-art 24,000 TEU vessels have been delivered and put into service on the Asia-Europe service.
"In 2024, we will continue to progressively deploy our ten 7,000 TEU wide beam newbuilds class," the ONE chief executive said.
"Additionally, we finalized our investment in three container terminals in Los Angeles, Long Beach and the Port of Rotterdam last November. We have continued to enhance our reefer and dry container fleet with new builds on a quarter-by-quarter basis as well," Nixon added.
More encouraging outlook North America, Europe
The ONE chief executive said in the company's initiative for 2024 that the economic outlook in North America and Europe is starting to look more encouraging due to the possibility of avoiding a hard economic landing in 2024.
He said that consumer spending has also started to recover on an annualized growth comparison basis, which has led to some positive inventory restocking developments over the last quarter.
Nixon went on to note that the regional political and military situation continues to be of concern.
"We are monitoring developments very closely to minimize risks to our seafarers, customers' cargo and operational assets," the ONE chief said.
Nixon said with regard to the Panama Canal, water levels in Lake Gatun dropped to levels not seen since 1950.
"As we are now officially entering the dry season, the situation, unfortunately, is not expected to improve till much later in the year," he added.
"In the meantime, we have had to divert some of our Asia-USEC services via the Suez Canal. However, in light of the latest Red Sea hostilities, these services are now further compounded by diversions in the Cape of Good Hope," Nixon said.
In terms of sustainability, ONE said it is working towards the introduction of the latest technology and fuel solutions to reduce greenhouse gas emissions.
ONE formally announced its orders for new 13,000 TEU vessels equipped with methanol dual-fuel engines to be delivered in 2027.
In addition, further research on developing zero-emission vessels and technology will continue, along with the use of ammonia fuel.
"To create a level playing field for the industry in terms of fuel standards and carbon pricing, we will actively encourage and support the formulation of new IMO regulatory guidelines," Nixon said.
"This includes cross-industry collaboration through various entities such as the Global Centre for Maritime Decarbonization in Singapore," the ONE chief executive, added.
