Temasek sold off NOL, so why save PIL?

Published Sun, May 31, 2020 · 09:50 PM

Singapore

TEMASEK Holdings decided against taking a long-term view with former flag carrier Neptune Orient Lines (NOL) five years ago. Why is it answering Pacific International Lines' (PIL) call for help now?

The outlook for container shipping is as bleak as ever. Big, slow vessels that carry cargo from port to port while offering little in the way of differentiation have rewarded the average liner with returns that lag its cost of capital.

Fierce competition, in the form of aggressive fleet expansion at the expense of profitability, makes long-term strategising difficult. And the market is plagued by chronic overcapacity.

Pro-globalisation policies that fuelled a decades-long trade boom have also given way to a new era of "slowbalisation", which could limit…