The year started rather hopeful and impressively and then it took a turn for the worse as jasmine revolution tidal wave hit Northern Africa nations and the Middle East, causing much uncertainties and fear in the world. Then, a 8.9 magnitude earthquake hit Japan in March and the resultant 10 metre tsunami wreaked havoc and caused massive destruction on the northeast coast of Japan , sending ripples of shockwaves across the global supply chain as Japan is a critical supplier of component parts for the electronics and automotive industry. To make things worse, by the second quarter, the euro-zone debt crisis came back in full-swing when Portugal rejected austerity measures in exchange for a bailout, while Greece is on the brink of a default and Italy joining the ranks of troubled economies, threatening a Euro meltdown. Crossing the Atlantic to the overspending US, the billions of dollars stimulus package hardly raise any significant impact on the GDP. And over to Asia, the so-called strong economies of China, Singapore and India is faced with rising inflation. However, Malaysia has not felt the tremors so much, as the Government’s Economic Transformation Program maybe insulating us from the effects of the global slowdown.
Dear colleagues,
The shipping sector did not fare well neither in 2011. What seem to be a glimmer of hope in mid 2010 when most of the shipping lines are back to the black and making handsome profit, sadly the momentum was not enough to carry sector into 2011. As major liners take delivery of their mega vessels ordered during the boom time, the cargo market saw an expanding supply amidst a falling demand, causing the freight rates to nose-dive to an unsustainable level. Many shipping lines scrambled to decrease their capacity and cut back on hired tonnage in an effort to reduce losses. Some have initiated slot-sharing agreements while some take more drastic measures such as in talks for merger and consolidation. Other than overcapacity, environmental regulations and anti-trust laws also have exert additional pressures to the shipping lines and rendered them less flexible in response to market situation. It is foreseeable majority, if not all the shipping lines will report losses for 2011.
Dear Colleagues,
Infinity too, has our own fair share of bad weather.
1. We have lost one major customer due to some changes in its logistics needs and partially due to the closure of the Tanjung Pagar railway station.
2. Next we experienced a slack management in Infinity Bulk Logistics which culminated in the retirement of the Managing Director.
3. Next we have the resignation of 2 overseas branch managers, that in a way or two has slowed us down a bit.
4. The Thailand flood, the worst in 50 years, which devastated the northern Thailand, causing 4.5 billion US dollars in loss, excluding the estimated between 23 to 28 billion US dollars in economic damage, has also affected our business in the 4th quarter.
Dear Colleagues,
Despite the afore-mentioned setbacks, Infinity managed to chalk up some good mileage in other areas, few among the rest are :
1. Our Freight Forwarding Division did well in positioning themselves in the Malaysian market.
2. Our Forwarding Division is ready now stand on its own feet and be a full-fledge business unit instead of a supporting unit all this while, and will be charging into the market next year with full force and vigour like a Dragon awakened
3. Penang Branch topped the list in Penang Port as the biggest Forwarding Agent for the 2nd consecutive year with the strong support from Southern Thailand
4. Jakarta and Belawan branches reported good results
5. The NVOCC Division managed to steer clear from the shipping sector slump which is quite extra-ordinary
Dear Colleagues,
WHAT WOULD YEAR 2012 HOLD FOR US ??
Most of the world economic institutions such as IMF, OECD and financial /business analysts like Financial Times or The Economist painted a grim and pessismitic outlook for 2012. The main focus is still on Euro-Zone crisis and the US growth rate. At this point, a Euro-Zone recession is almost certain, where political divide still preventing the EU leaders from a conclusive action, whereas , the US still grappling with high unemployment and financial sector fragility, growing at a snail pace.
The shipping sector worldwide is not looking good neither, as the Moody Investor Services gave a bearish outlook on the global shipping. New vessel deliveries and overcapacity will still plague the sector, pushing freight rates down. Most shipping lines are expected to be in the red and the amount is what matters most. Logistics worldwide will experience a downward trend as well in tandem with shrinking consumption in the struggling developed economies.
The only sparkle is that the OECD has projected a solid growth for South East Asia nations in the medium term around 5%, mainly from internal drivers such as the rising middle class due to political and socio-economic reforms in the region. The world will look forward to the BRIC economies – which are :
Brazil-Russia-India and China bloc, to pull the world out of the current mess and set the pace for the global economic growth.
Dear Colleagues,
Over the whole next year, Infinity would be on the CAUTIOUS mode, we will:
1. take calculated risks
2. invest sensibly and
3. manage our finances prudently
I am taking the opportunity here to urge all divisions to move away from the dependency on the Core divisions and
to venture out on your own,
spread your wings and soar !!
We must move away from reliance mindset….
1. relying on the Principle,
2. relying on the Integration business and
3. relying on Nominations from the core divisions.
We have officially obtained the Integrated Logistics Provider status and now the consolidation process for the Core divisions is underway, with ISFreight and Haulage merged into Infinity Logistics and Transport, and to be followed soon by Infinity Lines and then the Malaysian branches in the next financial year.
Dear Colleagues,
Year 2012 is a Year to Unbundle.
All business units should seriously review their work processes and target markets, enhance the efficiency and effectiveness of work and enlarge the market segments. We must do away with the cross subsidy mentality and strive to be self sufficient and generate your own profits .
The directions for Year 2012 :
1. The branches need to be stronger
2. Growth through non-asset investment
3. Freight Forwarding and Container Bulk Logistics will lead the Core Business Unit forward
4. Niche Logistics will be gaining strength and momentum
We expect in Year 2013 to expand strongly through heavy investment, and the NVOCC and Land Logistics Division will lead the way.
Dear colleagues
Let put our hands and heads together and brave through the turbulence of 2012 and emerge stronger and wiser , as the popular saying goes :
“What does not kill us , makes us stronger”
With that and all the strategies in place and with your Commitment together with Infinity, I am confident to say that we are prepared for Year 2012.
Once again, I would like to thank all of you, with your perseverance and dedication, we are able to complete Year 2011 fairly well and we look forward to your continual support in the coming year.
Thank You.
