I want to be a giant of Hong Kong Island

Chapter 290 [The giant wheel is rolling! 】

May 1959, Dongying, Global Shipping Division.

Wu Guangyao, He Yuanzhang, and Gao Ke are discussing about ordering new ships again.

In May 1957, after Global Shipping implemented the $5 million plan, the total loan amount was $1.2 million.

In two years, the net profit of global shipping (more than 230 million tons of load) was 2.6 million, and the monthly net profit was only less than 1100 million US dollars;
During the closure of Suez, the monthly profit of global shipping reached 4000 million US dollars.

In summary, there are three reasons that lead to this:

First: After the freight rate skyrocketed, it plummeted.In the later period, the price of European and American routes will fluctuate from US$12 to US$15, and the price of East China routes will fluctuate from US$7 to US$9;

Second: shrinking business.In the past two years, Global Shipping's business has been regarded as the most full fleet among all peers, about 80% full.The reason is that Wu Guangyao signed a three-year memorandum of cooperation with long-term customers in Dongying to ensure that global shipping is given priority in business (Suez guaranteed the supply of ships to various companies during the period and received a 9% discount on freight).The same is true in Europe and the United States. During the closure of Suez, Global Shipping did not take the lead in raising prices on the ground, and gave a 9.5% discount.

Third: cost increases.After the Suez Canal was managed by Egypt, tolls soared by 35%, and the wages of seafarers on Hong Kong Island also increased significantly. Various factors led to a substantial increase in costs.Of course, the wages of seafarers in Europe, America, and Japan have also increased accordingly.

In the past two years, the loan repayment was 1.2 million US dollars, and the container terminals in Sing Tao and London invested about 2000 million US dollars, and the balance in the account was exactly 1.2 million US dollars.

"Boss, the Global Shipping Research Office recently concluded that the shipping situation in Europe and the United States took the lead in improving; as you said, the industry in Europe and the United States will start to flourish in the 60s, and there is already a trend now. The recovery in Japan is relatively slow, and the price Although it has recovered around $8, the business is still only more than 80% of what it was before. It would be good if other fleets in Asia can have 70% of the business, and the long-term charter fleet does not need to worry about this problem, it is more popular.” He Yuanzhang said .

Wu Guangyao nodded, this is expected; after a sharp rise, a sharp fall, and then a rise again, this is the law of shipping.

The Global Shipping Research Office mentioned by He Yuanzhang was proposed by Wu Guangyao; he hired a team of experienced global shipping professionals, who usually work around the world, collect data, and then make a summary.

Although Wu Guangyao understands the general situation, the details also need to be done by people.

"What do you think, how about we sell some of the old ships (about 30 years old) in Dongying?" Wu Guangyao said.

When He Yuanzhang and Gao Ke heard this, they immediately said in unison: "No!"

Then He Yuanzhang signaled Gao Ke to say first, as the person in charge of Dongying, Gao Ke naturally has a great say!
"Boss, these ships can be used for three to five years if they go well, and can be used as retail leases or refitted container ships; if they are sold, we are equivalent to capitalizing on the enemy. The key is that these ships are not worth much, they can only use them Even if these ships are recycled scrap iron, they cannot flow into other ship owners on Hong Kong Island."

He Yuanzhang continued: "Yes, boss. And I guess, you want to sell it to your fellow countryman Bao Yugang! But boss, don't forget that Bao Yugang's ship business has not stopped in the past two years. It has developed into a ship owner with a deadweight of 10 tons. And I found that he is very popular with employers in Dongying, I think it is probably because he likes the long-term contract of one year charter!"

After Wu Guangyao heard what the two said, he woke up suddenly!

I'm too naive, Bao Yugang is my 'enemy', yet I still think about my fellow countrymen, the most important thing is not to have this kind of 'behavior of being an enemy'.

Wu Guangyao said modestly: "You two reminded me well! Indeed, Bao Yugang's status as a banker made him a duck to water in the shipping industry. I heard that he also got the LC letter of credit from Dongying Bank. It seems that he may Come from behind!"

"I can't see it for the time being, but he is indeed a stable businessman who knows how to use banks." He Yuanzhang said pertinently.

Wu Guangyao thought for a while, and then said: "In this case, you all remember one thing, that is, when Bao Yu first entered the field of oil transportation in Europe and the United States, our global shipping business in Europe and the United States also had to change the business policy appropriately. For For our loyal big customers and old customers, we can adopt a combination of long-term lease contracts and short-term lease contracts to gain their favor! Similarly, the three-year cooperation memorandum of Dongying old customers is about to expire, and we can also sign part of the long-term The contract can be regarded as stabilizing theirs!"

Wu Guangyao also decided that it is better to be a little more conservative in the follow-up management policy;
Judging from the experience of later generations, a large part of the reason why Bao Yugang came from behind is that he likes to rent long-term contracts of one to three years.

In the eyes of the bank, this way of operation obviously does not have too much risk, so the bank will choose to lend.

Coupled with his way of doing business, he has gained a good impression in Dongying. The government, banks, customers, and shipyards all like him and give him various conveniences.

In the late 60s, Dongying Shipyard was full of orders and could only suspend receiving business; but everyone would sell Bao Yugang's face and accept Bao Yugang's orders. This is an advantage.

There is another very important reason why Wu Guangyao changed his business strategy!
That is, the development of global shipping is too fast. Although there is no debt, the foundation (customers) also needs to be stabilized.

Wu Guangyao thought for a while, and said to the two executives: "Our global shipping will have another graded shipping price, and the shipping price will be set according to the age of the ship. For example, the shipping fee for a 30-year-old ship is only 70%; for a 20-year-old ship , the shipping fee is only 80%; so those customers who are against old ships may think that old ships are cost-effective, after all, our global shipping is all three guarantees (guarantee time, security, insurance).”

"Good idea!" The two said immediately.

Both of them believe that no one wants to make quick money, but it is impossible to make it all the time;

Especially to appease those old customers, those who do shipping know that the business is the most important, and the shipping cost is second.

"For the specific implementation plan, you convene the management to study it in detail, and I will not participate!"

"Yes, boss!"

Next, everyone will discuss how many 10-ton oil tankers and how many 7-ton cargo ships will be built this time.

The Second Middle East War (Suez Canal Crisis) dealt a huge blow to the world shipping industry.Although the canal has resumed operations, oil companies have lost confidence in its reliability.There has been a heated debate among European and American oil companies over the safety of the Suez Canal and the expansion of oil pipelines.Obviously, whether it is a canal or a pipeline, it is easy to be cut off.Then there is another alternative, which is to use tankers with larger loading capacity to bypass the Cape of Good Hope route in Africa.However, ship owners generally believe that the cost of large ships is high, the fuel cost is too high, and it is not easy to build.

Japanese shipbuilding companies smelled business opportunities from this, and they quickly broke this conclusion with practical actions. In February 1959, Japan's Kure Shipyard built the world's first oil tanker exceeding 2 tons - Universe Apollo.The ship has a total length of 10 meters, a total power of 290 shaft horsepower, a load of 27500 tons, and a speed of 10.45 knots.

Facts have proved that oil tankers of more than 10 tons not only meet safety standards, but also have cost advantages.

通常建造一艘10万吨级油轮约需钢材1.6万吨，若建造2艘5万吨油轮则需钢材2.4万吨。

Moreover, the larger the tanker, the more crude oil can be transported in a single voyage, and the average fuel consumption per ton of transport will be lower.

Wu Guangyao has read "The Biography of Bao Yugang", and he clearly remembers the 10-ton oil tanker and the 20-ton oil tanker, and behind them are the main oil tankers of global shipping.

That's why Wu Guangyao was sure that choosing a 10-ton oil tanker was absolutely right!

In the end, everyone decided to build 12 10-ton oil tankers and five 5-ton freighters.

In this way, the load capacity of new ships for global shipping has reached about 510 million tons, which is the level of Onassis in the late 60s.

(End of this chapter)