Neptune Orient Lines
Neptune Orient Lines (NOL) is a global transportation company that was established in 1968 as Singapore’s national shipping line. Today, the NOL Group’s core businesses are container transportation, terminal operation and supply chain management. NOL is listed on the Singapore Stock Exchange, and Temasek Holdings, the investment arm of the Singapore government, is its largest shareholder with a 68% holding. In 2009, the company employed more than 11,000 staff globally, operated a fleet of over 100 vessels and transported over two million forty-foot containers.
NOL was formed on 30 December 1968 as a shipping line wholly owned by the Singapore government. It was envisaged that the company would support Singapore’s industrial development by carrying a share of the nation’s trade at fair freight prices, and maintain a supply line of essential cargoes during times of crisis.
Then Finance Minister Dr Goh Keng Swee was the key decision-maker in the planning and establishment of the company, including issues regarding leadership and trade routes. Other officials involved in the planning of NOL’s aims and objectives, capital structure and trade activities included Hon Sui Sen, J. Y. Pillay, Sim Kee Boon and Eric Khoo.
The company’s immediate priorities were to acquire ready ships to enter the major trade lanes, which were at that time the Far East-Europe, Australia and United States trades. NOL also wanted to acquire tonnage to charter to third parties. NOL’s first ship, the eighteen-year-old Neptune Topaz, was purchased from the Hansa line and delivered in 1969. NOL also purchased its first tanker that year, the Neptune Taurus from Worldwide Shipping Group.
NOL faced initial difficulties as newcomers to the Far East-Europe trade. Many problems arose from its dealings with the Far-East Freight Conference (FEFC), which controlled the majority of the trade, including setting freight rates and the ports a line could visit. To be viable, NOL had to be part of the FEFC, but the company also had to fight to gain entry and for an equitable share of the trade.
In addition, the company’s inexperience, operational weaknesses and lack of knowledge of the shipping market made it difficult to secure high-value cargo. After some initial reluctance, local and foreign companies began to ship with NOL, its early customers included Lee Rubber, Tropical Produce and Ang Woo Liang.
The Singapore government understood the early challenges of entering the shipping trade, and supported NOL with capital and direct loans. Realising that the company was under-capitalised, the government converted its loans to capital, improving NOL’s gearing and reducing the carrier’s losses. In November 1969, the government transferred ownership of NOL to Temasek Holdings. In mid-1970, NOL started its cadet training ship programme, and developed its ship management capabilities.
NOL became profitable under the leadership of Goh Chok Tong, who later became Singapore’s second Prime Minister. Goh implemented a cargo management system, improved staff welfare and morale, and separated the company’s ship owning and operating concerns. NOL saw its first annual profits in 1975, despite a slump in the shipping industry. Goh left NOL in September 1977 to begin his political career.
With the industry moving towards containerisation in the 1970s, NOL was constrained by its relatively small size as well as FEFC trading limitations. It started accepting containers on its conventional ships, and revamped its fleet accordingly. In 1970, NOL also extended its network into the Australia trade, joining two conferences on that route, and planned its drive into the tanker market.
In 1975, NOL formed the ACE consortium with OOCL, “K” Line and Franco-Belgian Services, with the Korean Shipping Corporation and Cho Yang joining two years later. The new consortium became known as the “third force” in the container-shipping world, after Trio and SCANDUTCH. By the end of 1976, ACE became the first grouping to offer fixed-day weekly services between the Far East and Europe.
Under Goh’s successor, Lua Cheng Eng, NOL broke into the highly competitive and profitable trans-Pacific route between Asia and the United States. The company invested in land-side terminal infrastructure in the US in the early 1980s, and later worked with KSC and OOCL to extend its reach there.
In 1981, NOL became the first wholly government-owned company to be listed on the Singapore Stock Exchange. The float bro