KUCHING: Shin Yang Shipping Corp Bhd (Syscorp) is capitalising on its strategic alliance with Northport to bolster its container shipping business.
Via the strategic alliance called “East Malaysia Network”, the Syscorp group is expected to increase its container shipping, according to chairman Tan Sri Ling Chiong Ho (pic).
“Under this alliance, Northport will provide efficient and effective port services with high terminal productivity while the partners will aim to achieve economies of scale to increase shipping service frequency routes coverage between East Malaysia and West Malaysia from our existing 14 units of container vessels,” he said.
He said the group had continued to improve on fleet efficiency, routes enhancement as well as the plying speed of its fleet of vessels.
Reviewing the group’s performance for the financial year ended June 30, 2018 (FY2018), Ling said its container vessels recorded a 14% increase in cargo shipment year-on-year by transporting 111,621 TEUs (twenty-foot equivalent unit) against 98,075 TEUs in FY2017.
The container vessels’ utilisation rate improved to 83% from 80% in FY2017.
In the new quarter,the group has acquired two container vessels, with carrying capacity of 800-1,000 TEUs per trip, to beef up the fleet.
Syscorp, which operates a fleet of 268 vessels with gross registered tonnage of some 380,300, shifted the focus of its container shipping business to domestic routes after ceasing the unprofitable regional operations about three years ago.
Its fleet of container vessels now ply between ports in Sabah, Sarawak and Peninsula Malaysia.
Syscorp has reportedly gained after another Sarawak-based key player Hubline Bhd withdrew altogether from the container shipping business in Malaysia and the region in late 2015 to stop heavy losses due to overcapacity and depressed freight rates because of stiff competition for cargoes.
“Locally, we analysed that coastal shipping is the major growth covers for the local demand for infrastructure and resource based projects,” Ling said in the company’s 2018 annual report.
Besides container shipping, Syscorp is involved in dry bulk and liquid bulk shipping businesses as well as in Middle East operations.
However,the group has reduced its shipping activities in the Middle East region due to unstable demand in view of the prolonged fluctuation of oil prices to fund the development projects there.
In FY2018, the group’s eight cargo vessels transported 410,000 cu m of timber products to the Far East regions.
On the return bound, these vessels were mainly on time charter for shipment of general cargo to Philippines before enroute back to Malaysia.
For liquid bulk,the group transports crude palm oil (CPO) from Malaysia and Indonesia to the East Asia region.
During the year under review,the group renewed an eight-month contract of affreightment to ship methanol products from Labuan with Petronas Chemical Marketing (Labuan) Ltd.
The CPO tanker is also on constant time charter to a Chinese shipping company with a fixed time charter rate.
Ling said the continuous infrastructure development generated a lot of supporting internal spring-off activities,like the requirement for shipping of third party logistics and projects based plying South East Asian regions.
He said Syscorp’s barges and tugs would continue be required in the development projects for Brunei Darusalam’s new capital city.
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