Annual Report 2012


>> P.23

FORMATIONOFAROROCARGOTEAM“K”LINEISINCREASINGTRANSPORTATIONCAPACITYTOMEETCUSTOMERNEEDSTOHANDLEAWIDEVARIETYOFROLL-ON/ROLL-OFFCARGO(ROROCARGO),INCLUDINGCONSTRUCTIONMACHINERYANDHEAVYVEHICLESANDSTATICCARGO.TOFURTHERSTRENGTHENCUSTOMERCONVENIENCE,INAPRIL2012WEFORMEDAROROCARGOTEAMTOPUTSTRATEGICFOCUSONTRANSPORTATIONDEMANDFORALLTYPESOFROROCARGO.OVERVIEWOFFISCAL2011FISCAL2011WASAYEARWITHASERIESOFMAJORNATURALDISASTERS.JAPAN’SAUTOMAKERSINCURREDENORMOUSDAMAGEFROMTHEIMPACTOFTHEGREATEASTJAPANEARTHQUAKE,ANDALTHOUGHTHEYRECOVEREDFASTERTHANEXPECTED,THANKSTOTIRELESSRESTORATIONEFFORTS,THEEXPORTVOLUMEOFCOMPLETEDBUILT-UPCARSFROMJAPANDECREASED6%FROMTHEPREVIOUSYEAR.INAUTUMN,CATASTROPHICFLOODINGINTHAILAND,APRODUCTIONBASEFORMANYJAPANESEMANUFACTURERS,TEMPORARILYBROUGHTPRODUCTIONTOAHALT.NEVERTHELESS,THE“K”LINEGROUP’SFULL-YEARTRANSPORTATIONVOLUMEROSE8%YEARONYEARTO3.3MILLIONVEHICLESASARESULTOFSUCCESSFULEFFORTSTOWINORDERSTOMEETROBUSTDEMANDFORCARSBOUNDFORCHINAANDOTHERDEVELOPINGCOUNTRIES.BYREGION,ALTHOUGHCARGOVOLUMESFROMJAPANTONORTHAMERICA,CENTRALANDSOUTHAMERICA,EUROPEANDTHEMEDITERRANEAN,ANDAUSTRALIAANDASIADECREASED,CARGOVOLUMESFROMJAPANTOTHEMIDDLEEASTANDAFRICA,ONROUTESBETWEENFOREIGNCOUNTRIES,ANDFROMEUROPEANDNORTHAMERICATOASIAINCREASEDSHARPLY.WITHREGARDTOPROfiTANDLOSS,WERIGOROUSLYENGAGEDINSLOWSTEAMINGOPERATIONSINRESPONSETOPERSISTENTLYHIGHFUELPRICESANDIMPLEMENTEDOPERATINGCOSTREDUCTIONS,INCLUDINGLAY-UPOFVESSELSTOABSORBSUDDENDECREASESINTRANSPORTATIONDEMANDRESULTINGFROMNATURALDISASTERS.ASARESULT,REVENUESINCREASEDANDPROfiTSDECREASEDYEARONYEAR,ANDTHECARCARRIERBUSINESSOPERATEDATALOSS.FISCAL2012BUSINESSOUTLOOKTHEIMPACTONTRANSPORTATIONOFCOMPLETEDBUILT-UPCARSFROMTHEGREATEASTJAPANEARTHQUAKE,flOODINGINTHAILAND,ANDOTHERNATURALDISASTERSHAVINGRUNTHEIRCOURSE,TRANSPORTDEMANDISEXPECTEDTOBEBASICALLYSTABLEINFISCAL2012ANDBEYOND.ALTHOUGHTHEPERSISTENTLYHIGHYENREMAINSACAUSEFORCONCERN,WEFORECASTAYEAR-ON-YEARINCREASEINEXPORTSOFCOMPLETEDBUILT-UPCARSFROMJAPANONGRADUALMARKETRECOVERYINNORTHAMERICA.INEUROPE,SINCEPROSPECTSFORRESOLUTIONOFTHEDEBTCRISISINEUCOUNTRIESREMAINUNCERTAINANDTHEPROBLEMMAYFLAREUPAGAIN,CARSALESINTHESEMARKETSAREEXPECTEDTODECLINE.HOWEVER,TRANSPORTATIONOFCARSTORUSSIAISEXPECTEDTOCONTINUETORISE,ANDWEFORECASTANOVERALLINCREASEINTRANSPORTATIONVOLUMESBOUNDFOREUROPE.ALTHOUGHECONOMICGROWTHINCHINAHASSLOWED,ITREMAINSROBUST,ANDTHEFLOWOFCOMPLETEDBUILT-UPCARSFROMEUROPEANDNORTHAMERICATOCHINAREMAINSSTRONG.ININDIA,WHEREMARKETCOOLINGHASAFFECTEDDOMESTICDEMANDBUTEXPORTDEMANDISINCREASING,WEWILLMEETTRANSPORTATIONDEMANDBYFULLYUTILIZINGTHESERVICENETWORK“K”LINEHASDEVELOPED.FURTHERMORE,DECENTRALIZATIONOFTHEPRODUCTIONSTRUCTUREBEINGIMPLEMENTEDBYAUTOMAKERSISEXPECTEDTOLEADTOHIGHEREXPORTSTONEIGHBORINGCOUNTRIESFROMNEWPRODUCTIONBASESININDONESIA,CHINAANDOTHERASIANCOUNTRIES.ACCORDINGLY,“K”LINEWILLREORGANIZETHEINTRA-ASIANSERVICENETWORK,USING“K”LINETERMINALSASHUBS,TOSTRENGTHENANDIMPROVESERVICESBYINCREASINGSAILINGFREQUENCY.INTHEATLANTICREGIONASWELL,WEWILLREORGANIZESERVICEROUTESINRESPONSETOCHANGESINTRANSPORTATIONDEMANDANDFURTHERSTRENGTHENTHETRUNKROUTENETWORK.QUALITYCONTROLOFCARGOHANDLINGISTHEMOSTIMPORTANTINITIATIVEINCARTRANSPORTATIONBUSINESS,AND“K”LINEHASCONTINUOUSLYDEVISEDIMPROVEMENTSDURINGMORETHAN40YEARSOFEXPERIENCEINOPERATIONASACARCARRIERPIONEER.THEQUESTIONOFHOWTOSAFELYTRANSPORTCUSTOMERS’PRODUCTSISALWAYSTHEFOREMOSTCONCERNFORACARCARRIEROPERATOR,ANDTHISYEARWEWILLONCEAGAINCONDUCTASAFECARGOHANDLINGANDSAFENAVIGATIONCAMPAIGNTOUNITEANDFOCUSTHEEFFORTSOFEVERYONEINVOLVEDINLANDANDSEATRANSPORTATIONONSAFETY.CHANGEINTHENUMBEROFSHIPSINOPERATION(VESSELS)NUMBEROFSHIPSINOPERATION(ASOFMARCH31,2012)(CAPACITY)(VESSELS)6000UNITS345000UNITS214000UNITS243000UNITS42000UNITS8800UNITS6TOTAL97TOPICSNON-SELF-PROPELLEDCARGO23ANNUALREPORT2012


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