MOL shrinking fleet by 40 ships as part of defensive measures in response to COVID-19 crisis


Japanese shipping major Mitsui O.S.K. Lines (MOL) has devised a plan comprising defensive measures the company should take in order to reduce market exposure and reexamine investment plans in response to the coronavirus pandemic’s impact.

In order to be able to chart its path forward, MOL had to review the impact of the pandemic on the markets it operates in and look into the forecasts for megatrends of the world economy in the COVID-19 and post COVID-19 era.

LNG Carrier Merak
Image courtesy MOL

MOL said that the analysis shows that a significant decline in ocean transport volume and a restrained stance on customersʼ investments will be unavoidable in the foreseeable future.

Recovery in the tanker and bulk shipping market is expected in 2021 and 2022 respectively, while some trades like the seaborne transport of cars are not expected to recover to 2019 levels until 2023 or even later.

In view of such developments, MOL has decided to reduce its fleet of oil tankers, bulkers, car carriers by a maximum of about 40 ships, including 13 vessels that have already been confirmed. Furthermore, the company said it would hedge from risks through time charter outs of its ships and forward freight arrangements.

MOL also plans to halve its investment plans for the upcoming two years from ¥200 billion ($1.86 billion) to ¥100 billion. The Japanese major added it would dispose of non-core business assets such as listed shares and real estate.

Moving forward, the company anticipates acceleration of the energy transition and shift to renewable sources of energy to dominate all businesses followed by the advancement of digitalization and review of supply chains pushing toward attaining self-sufficiency.

In line with these predictions, MOL has also defined its offensive.

As part of its business offensive, the company plans to reform business models and implement cost reduction measures, while focusing on expanding LNG business domains and developing new energy-related businesses such as wind power generation and strengthening renewable energy-related businesses (transport of fuel for biomass power generation etc.)

” Concerning “three core strategies to realize the 10-year vision,” with regard to “Portfolio Strategies,” we recognize that the shift of global energy demand to LNG and renewable energy will further accelerate. In the overall offshore businesses under our strategic field, we will invest management resources selectively, while shifting our focus to these growth fields,” MOL said.



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