Beginning as a small general import-export business in Liverpool, the UK-based John Swire & Sons expanded its business internationally first in Melbourne, Australia, in 1855 – where a diverse range of goods including fencing wire, cement, olive oil and even Guinness were traded under the name Swire Bros – then into China in 1866, initially as a goods trader, following the disruption of its Trans-Atlantic business as a result of the American Civil War. As Butterfield & Swire – locally known as Taikoo – spread steadily across the country, new opportunities opened for it.
One such opportunity appeared in the Yangtze River, a vital water link for the country that carried high volumes of cargo but very few passengers. Seeing an opportunity to capitalise on this gap, John Swire acquired Mississippi-style paddle steamers and operated them along the Yangtze River providing transport for both passengers and cargo. This venture was set up in 1872 and named The China Navigation Company (CNCo), gaining success by the turn of the century due particularly to its carriage of beancake – a fertiliser made of compressed soybean husks – from the north to the south of the country.
The decades following saw an ongoing expansion of its activities and subsequent success across the board including international routes shortly after World War Two; the introduction of unitised shipping to the region in the 1960s, and the first company to offer it containerised shipping in the 1970s; passenger cruising out of Australia and New Zealand in 1961 and out of Japan in the 1970s; a step into VLCCs and handysize bulkcarriers during the 1980s and investments in container feederships and the Capesize sector in the 1990s. The company today is known for its multipurpose fleet and associated liner shipping activities, CNCo has also developed expertise in the bulk logistics sector having first entered this market in 1999 with a contract to supply and operate a floating storage and transhipment platform for Ok Tedi Mining. In 2003, CNCo acquired Bank Line from Andrew Weir and Indotrans from Oldendorff, adding a huge range of new services and vessels to its portfolio and placing it at the forefront of the multi-purpose shipping market.
CNCo remains part of the Swire group of companies today but operates independently, offering liner services to more than 130 ports around the world though focusing primarily on the Asia-Pacific region. It carries containers, bulk, break bulk and project cargoes. The foundation of these services must be its reliable fleet and Tim Blackburn, managing director, talks in more depth about the vessels used by the company: “The CNCo-owned fleet is currently comprised of 13 multipurpose vessels (MPVs) and one converted panamax transshipper. The company’s liner shipping division, Swire Shipping, currently operates 14 owned vessels and approximately 20 chartered vessels. In addition to the owned and chartered fleet, there are also eight S Class 31000 DWT multipurpose, as well as four 39,000 DWT handysized, bulk carrier newbuildings due for delivery between January 2013 and mid-2014.
“The first of the eight 31,000 DWT ship series will be delivered in early 2013 and will be followed by one ship per month. Steel cutting for this first vessel commenced in early March 2012 at the Ouhua Shipyard in Ningbo, China. It is anticipated that these high specification, fuel efficient MPVs will be delivered to Swire Shipping’s liner trades operating between Far East, Pacific Islands and Australia / New Zealand as well as Trans-Pacific routes between Australia / New Zealand and the west coast of North America. The S-class newbuildings will add additional capacity to the Swire Shipping multipurpose liner network. In addition to this increased capacity, the eco design will improve fuel efficiency and enable Swire Shipping to reduce slot costs whilst increasing operational efficiency of the CNCo fleet.”
CNCo has a long history of proven experience and skill in the sectors that it works, and its long established liner services are an excellent example of this. It connects ports across Asia Pacific, Europe and North America through its owned and operated fleet as well as partner and subsidiary companies including Swire Shipping, New Guinea Pacific Line (NGPL), Greater Bali Hai (GBH) and Polynesia Line Ltd.
Bulk logistics is another area where CNCo has excelled in its expertise. Today the company continues to run its Ok Tedi Mining contract at the mouth of Fly River in Papua New Guinea, using the 65,000 DWT panamax vessel Erawan to store, transport and tranship copper concentrate. The vessel is capable of reliably shifting up to 15,000 tonnes of material a day and this has cemented CNCo’s position as a leading light in primary bulk logistics in the Asia pacific region. Developing this experience, the company has established a joint venture with C Transport Maritime to found Swire CTM Bulk Logistics, which specialises in providing bulk logistics solutions and services for clients operating in challenging environments.
Elaborating on the previously mentioned environmental concerns that underline all of CNCo’s operations, Tim discusses the Sustainable Shipping Initiative (SSI) that the company has helped to launch: “CNCo is one of 16 industry members of SSI that have given themselves 18 months to achieve four specific targets that will help guide the industry towards environmental and financial sustainability by 2040.
“We are part of a working group that includes Maersk Line and Carnival Corporation tasked with creating a model for sustainable building and disposal of ships based on the concept of ‘closed-loop material management’, which minimises industrial impact on natural resources by tracking all the material going into a new ship and then recovering and reusing the maximum amount of these materials at the end of the vessel’s life. A pilot project for this will be initiated on the new CNCo ‘S’ and ‘W’ classes of ships currently under construction in China.
“Between 90 and 95 per cent of the material from ship disposal is steel of varying grades that is recycled by shipyards. If the grade and location is not accurately known, high tensile steel is resmeltered with low carbon steel and much of the value of the material is lost. The rest then requires complicated processes to separate
and recycle, and it also contains hazardous materials such as asbestos that many yards – particularly in Asia are ill equipped to handle. The industry estimates that shipyards can recover an additional ten per cent in the value of scrap material through improved track and processes.
“The SSI members who announced their action plan late in April 2012 at Fort Canning Park as part of Singapore Maritime Week have committed to taking the lead in adopting cleaner technologies. We are not a group that is going to sit and wait for others to introduce new technologies or to be instructed by regulators.”
This major initiative caps the intensive environmental as well as the health, safety and quality standards that define all of CNCo’s activities and has driven it to become one of the most successful names in the region. Prioritising and increasing the standards of its safety awareness training as well as encouraging the interaction between employees and contractors commit the company to achieving the highest standards of safety.
As Tim points out, recent times have also seen a number of changes to the company’s outlook and infrastructure: “Over the last two years, CNCo has undertaken the major challenge of relocating to Singapore from Hong Kong and centralising some of the divisional activities and responsbilities previously based in Sydney and Auckland. We have also progressed newbuilding opportunities to provide long-term, fuel-efficient, modern tonnage solutions to our liner and handybulk divisions in the last few years. This furthers the company’s commitment to being a leading supplier of sustainable shipping solutions, and our customers’ partner of choice, which is challenging given the volatility of shipping markets and the many obstacles encountered.”
Looking forwards, the future of CNCo looks to be as lengthy as its history. It has a good position within a rapidly growing market, and its choice to pursue environmental sustainability will ensure that it remains relevant well into the future. The recently established Swire Bulk Shipping division presents interesting opportunities to expand CNCo’s capability and to diversify its operations to provide customers will a multiple shipping solutions. Tim concludes with a brief but defined plan for the long-term: “The high specification S Class multipurpose and the BDelta37 eco-design handysize newbuildings are the key to CNCO’s long-term strategic ambitions as a sustainable multi-purpose and dry bulk owner and operator.”