I left Haneda Airport for Seoul, Korea on last Dec 26 to join the Annual meeting of EFI’s partner company held from Dec 27(Mon) to 29(Wed) for 3 days.
It was the first time for me to take business trip in late December. Last December was quite busy but productive because in mid December my friend of mine who lives in Singapore visited me with his family (12 year old daughter, 10 years old son and his wife) on the way to vacation to Hawaii. It would be my great pleasure of seeing them in Japan in their limited and valuable time. Our Japanese hospitality of inviting them for dinner at my home would hopefully impress them Japanese life and culture to some extent. New Year’s greeting cards had been prepared by handwriting as usual for expressing my gratitude to customers as well as private to be delivered on Jan.1. Several year-end parties were attended. In addition, every Sat.& Sun tennis practice were energetically joined, December market report completed and the slides of my presentation of the meeting to be presented beforehand. Moreover, it was a great pleasure to have concluded a big business in December.
The lowest temperature in Seoul was minus 8 degree C. there was 2~3 degree difference between the lowest and the highest. It made me hallucinate that I became an iceman from the sole of foot. Meantime, the city of Seoul seems to have nothing to do with the war-like tension with North Korea from the din and bustle of the city.
I would like to describe EFI’s partner company a bit. Working hours starts at 8:30 and most staff comes to office at 8:15. All staff is about 30 people. Man and woman half and half. The average age is 30 years old? They cover China, Middle East, Russia, N. America, Europe worldwide for sale of container. Their experience is over 10 years. The overseas staff will come back to attend this Annual Meeting. This company will send the staff overseas 5~6 years after graduate to represent the company. No distinction between man and woman. Their attention was paid to the world and they deal with the world.
The meeting started at 9:00 am sharp. The first day continued till 6:30 pm. The overseas staff should reply various questions from all attendants for their 2010 performance and the action plan of 2011. To my impression they are quite earnest and facing the problems with the sincere attitude. They have not lost their innocence at all. It would be quite impressive for the youth of less experience to have devoted themselves to do business under difficult situation in the foreign country. I told them that I love Korean food so that they took me to the local Korean restaurants which offered the delicious Korean food for lunch and dinner which Japanese travelers could not enjoy by themselves. I always think Korea is richer than Japan in food and Korean food is better than Japanese in nutrition because fresh and green vegetables come from any Korean dishes of fish and meat. I love Kimchi which are countless in variety. Kimchi are served as you like without additional cost if you order the main dish. I am confident that the Kimchi culture represents the true Korean hospitality. Therefore, I am always enjoying Korean dishes in Korea. Moreover, alcohol still plays an important role as a lubricant among people in Korea. One of directors who looks after the world based on Shanghai went out for drinking with the young staff including overseas every night for the reason that he could not see them once a year. I admire him for his giving vent their frustrations by drinking together late at night. It reminded me of old days of my young age which was 30~40 years ago. In Japan we had experienced the same scenery. At that time Japan was not rich but we had felt great joy for Japan to have been developing. It is regretted that such spiritual uplift seems to have been like the far past to me. That director told me that there has been no choice for them to go abroad for business or to do business with other than Korean. Therefore, Korea has been desperate for survival. This kind of challenging spirit has lacked in Japanese youth. Korea was once under control of IMF in the economic crisis of 1997. They had executed a reform in great hardship which has brought them vitality of the top runner in many economic aspects.
I believe that the coming 2~3 year is the crucial point to Japan. She could not execute a reform until IMF forces her? I don’t think so. If we stop introverted thinking, if we turn our faces overseas and if we recognize that Japan could not exist without other counties of the world we could see what we, Japanese have to do. The persistence of our past success in economy could weaken challenging spirit. Sharpening our challenging spirit by changing ourselves would be inevitable to break through the armor protecting ourselves. Japanese have to be humble at the age of 66 years after the war. This is a good example. Korea has a lot of thing which Japan learn and we have to face each other as a good competitor. As a result it will make us change. There are many 2nd hand dealers in Korea. However, I am confident that they are a precious partner with EFI.
The major shipping lines have greatly recovered from Lehman shock by producing the historical profit in 2010. Export of 2011 is forecasted by 6~9% up from Asia to North America and by 6% to Europe. Therefore, shipping lines expect more profitable in 2011 by the freight rate recovery. Total 29 container ships of over 10,000 teu were introduced in the market in 2010 and in 2011 the mega ships of over 10,000 teu would share by 62% of total new containerships of 2011. Most of them will be put in service in Europe trade and the current existing big ships of 5,000~8,000 teu will be transferred to the Middle East, North and South trade one after another. The freight rate competition without discretion would bring them in a war of attrition. The reasonable service deserves the appropriate consideration. There exists no business without profit. In order to avoid over capacity I sincerely wish shipping lines tax their brain for a solution among shipping lines or alliances. Shipping lines have contributed to development of the world economy. The world has no future without shipping lines. With such confidence shipping lines or alliances should contend each other for better service. The makers with worldwide network could make more profit based on their competition. Shipping lines could play a role of contributing happiness to the world
On the contrary Chinese container makers would not much increase their production capacity because of maintaining high price and improving profitability. They seemed to have learnt this in Lehman shock. They seems to evade risk after increasing capacity in consideration for expense vs effect of reinvestiment. Container price would be $2,700~2,800 per 20f for the time being. However, it would be unlimitedly close to $3,000 per 20f depends on the raise of materials.
The operation ratio of leasing companies would unusually stay high like 95~98%. They have been enjoying historical high and long utilization. However, they try to sell their old containers including 7~8 year old under a good market. They bought 20f in the range of $1,300~1,500 per 20f 7~8 years ago. The upshot is the official number of ownership of leasing companies would not be correctly reflected to some extent. Shipping lines have to extend their container life and the renewal of L/Ts’ with leasing companies several times would inevitably make leasing containers older. It would be imaginable for many old containers to be into the 2nd hand market some day. 2nd hand market could absorb all containers? Maersk Line decided to extend their container life from 15 years to 18 years. What condition of 18 years old would be? Are there demand for such old containers? Therefore, there is the pressing subject for us to grow 2nd hand market worldwide. It would be the leg-irons of containerization if it would cost us to dispose old containers. It would be an ideal if old container could be recycled to good quality of iron to build new containers at the low cost. I eagerly wish it would be materialized soon.
This year, 2011 is 2nd year to EFI since established in March in 2010. In the 1st year of 2010 EFI has achieved more than expected. I would like to thank all of you from the bottom of my heart for your strong support to EFI. I found that the market was also supportive to EFI to play a role of acting between Japan and overseas. I am confident that there are many customers who wait for EFI even in matured market in Japan. EFI seems to have already experienced 2~3 years for first year.
Exporters of 2nd hand containers in Japan have suffered from strong Yen staying high like $1.00=\83~84. As a result Japan seems to be surplus of containers in coming years to some extent while container shortage in China, Korea… in Asia exist. It would be a big challenge for us how surplus of old containers would be moved out of Japan smoothly.
Mr. Ikuta, the senior advisor of MOL is writing in the column of my personal history for Nikkei Newspaper (one of the Japan leading economic newspaper) from Jan, 2010. It is quite interesting to know how he entered in MOL and the story of merger to be MOL. I am impatient for his continuation of his story. In my leasing company age I remember that Mr. Ikuta, the president of MOL at that time unexpectedly come to the person in charge and started talking with him friendly in front of me. In addition I saw him in the lobby of MOL headquarter building and I bowed him slightly so he used to return his nod to me. I was deeply touched by his friendly manner. I also would like to refer to Mr. Miyahara, Chairman of NYK. I remember that Mr. Miyahara was eagerly listening to me about my presentation of our leasing company when he was the general manger of container group. He moved to the car carrier dept. later and became the president of NYK after several years. I met him at his celebrating party and I felt much obliged to him for his request of supporting NYK with more containers. They had been deeply fascinating me with their consideration about their staff working in the front after reaching the top management. Company is people. The excellent companies who have long history would grow from small. I wish EFI could expand big by adding several talented staff this year to make our customers happier.