Confronting Challenge

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Confronting Challenge with Blue
Ocean Strategy

Mao Shijia ???
China Shipping Development Co., Ltd. Tanker
Company
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• The influence of global economy
• on tanker market

Contents
2. Strategy for recovery
3. Tanker owners countermeasures to the
challenge of market downturn
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The influence of global economy on tanker market

• How long will the market downturn last?

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Demand-supply Dynamics Tanker market (1968-2008)
VLCC MEG-West freight rates in peak during
2004-2005
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The Oil Tanker Fleet ( 2009-2013)
Source Clarkson Research Studies
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Tanker FFA Report 16 April 2009
TD3260 kmt ME Gulf Japan TD5130 kmt W
Africa - USAC TC430 kmt Singapore - Japan
TC555 kmt Middle East- Japan
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Strategy for recovery

• How can we get out of the market plight?
• Blue ocean strategy

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• Faced with shipping market downturn, many
  ship owners adopt red ocean strategy by fighting
  for market shares, competing on prices, pinning
  rivals down for survival, etc.
• Chinas tanker owners need to confront
  challenge with blue ocean strategy.
• Attach importance on customers demand, switch
  the focus from efficiency into value creation.

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Tanker owners countermeasures to the challenge
of market downturn
Two keys Strategic cooperation and service
innovation
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1. Strategic cooperation
Adhering to the strategic direction of equality
and mutual benefit, proactively develop various
cooperation with customers. ie. COA,
Joint-venture, etc.
Tight links between vessel and cargo
Chinas tanker owners need to make a joint
effort get through severe winter. ie. Set up
tanker pool.
Cooperation among Chinas tanker owners
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Strategic Cooperation

• Enhance the ability of risk prevention
• Increase confidence
• Share experience and exchange views
• Build correlative mechanism
• Exert enterprises cutting edge

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2. Service innovation

• Blue ocean strategy focus on breaking tradtional
  boundary and exploring new market
• Tradtionally,tanker owners provide sea-borne
  transportation service to customers
• With the development of supply chain theory,
  tanker owners offer sevrices not only to
  sea-borne shipping, but also to a intergrated
  transportaton
• China tanker owners need to extend service areas
  and innovate service methods.

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As long as we have the confidence, promote
strategic cooperation and follow service
innovation, we can go out of the market plight,
turn challenge into opportunity, and embrace the
renaissance of shipping market.
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Thank you
China Shipping Development Co., Ltd. Tanker
Company