Neptune Orient Lines

Singapore Infopedia

by Chua, Alvin, Lim, Tin Seng


Neptune Orient Lines (NOL) is a global transportation company established in 1968 as Singapore’s national shipping line.1 Through the container shipping brand, APL, NOL’s core business activities include all aspects of global cargo container transportation.2 The shipping carrier is currently owned by the French CMA CGM, the world’s third-largest container shipper, after it bought over Temasek Holdings’ majority stake in NOL in December 2015.3

NOL was formed on 30 December 1968 under the auspices of the Ministry of Finance. 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, especially during times of crisis. In November 1969, the government transferred ownership of NOL to Temasek Holdings.4

Then-Finance Minister Goh Keng Swee was the key decision-maker in the planning and establishment of the company, including issues regarding leadership and trade routes. Other key officials involved in the early planning of NOL included Hon Sui Sen, M. J. Sayeed, Goh Chok Tong and Eric Khoo.5

Early years
The immediate priorities of the company under the stewardship of its first managing director, Sayeed,6 were to acquire ships to launch a conventional liner service in the Far East–Europe trade to link Singapore to its main European markets. The first ships that NOL acquired were Neptune Topaz and Neptune Zircon – two heavy-lift ships from the Hansa Line – in May and July 1969 respectively. By the end of 1969, NOL had purchased another two ships: Neptune Amethyst and Neptune Aquamarine.7

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 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; however, the company had to fight to gain entry and for an equitable share of the trade. In the end, the FEFC only allotted NOL 15 percent of the Far East–Europe trade from Singapore, which was way below the recommended 40 percent set by the United Nations Conference on Trade and Development.8

In addition, the company’s inexperience, operational weaknesses and lack of knowledge of the shipping market made it difficult to secure high-value cargo. Nevertheless, the company was able to secure deals with local and foreign companies such as Lee Rubber, Tropical Produce and Ang Woo Liang. It also extended its network into the Australia trade and diversified to other areas such as the charter and tanker businesses, which saw the company purchasing its first tanker, the Neptune Taurus. Further, NOL started its cadet training ship programme and developed its ship management capabilities. By 1973, NOL’s fleet had grown from zero to nearly 20.9

Profits and expansion
Despite these, NOL continued to operate at a loss. It was not until 1975 that it recorded its first profits. This occurred when NOL was under the leadership of Goh Chok Tong, who had joined the company in 1973. At the time, NOL implemented a cargo management system that allowed the company to maximise earnings for every voyage based on the optimal mix of cargoes. It then improved the company’s efficiency by separating its shipowning and operating concerns. The carrier also changed its business strategy by steering it into the era of containerisation. This prompted the company to revamp its fleet with the purchase of new fully cellular vessels, and the conversion of existing semi-containerships into fully cellular vessels.10

In 1975, NOL formed the Asian Container Europe (ACE) consortium with Orient Overseas Container Line (OOCL), Kawasaki Kisen Kaisha Ltd (K Line) and Franco-Belgian Services; Korean Shipping Corporation (KSC) and Cho Yang joined 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 had become the first grouping to offer fixed-day weekly services between the Far East and Europe.11

After Goh left NOL to enter politics in 1977, Lua Cheng Eng succeeded him. During Lua’s time, NOL broke into the highly competitive and profitable trans-Pacific route between Asia and the United States. It also 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. Following five straight years of profits, NOL applied to be listed on the Singapore Stock Exchange in 1981. The float brought S$155.7 million in net proceeds, some of which was used to purchase new bulk carriers and container vessels, as well as the NOL Building on Alexandra Road.12

In 1986, due to a slump in the shipping industry, NOL experienced its first loss of S$60.1 million in nearly a decade. By 1988, however, it had swung back into profit by posting a record of S$50.7 million.13 In the same year, Temasek Holdings also relinquished its control over NOL by reducing its stake to 49 percent. The move was made to remove NOL from the US Controlled Carrier Act, which enforced a set of regulatory requirements to government-controlled shipping lines. This way, NOL would be able to align its shipping rates more closely to market conditions.14

By the end of the 1980s, NOL was not only in the liner, tanker and bulker markets, but also in other businesses such as logistics, ship management and marine services. NOL continued to expand and diversify: In the early 1990s, NOL moved into the lightering business by building up its fleet of oil and petroleum product tankers, and set up a lightering company called American Eagle Tankers (AET).15

Acquisition of APL and subsequent losses
In 1997, NOL made global headlines with its US$825 million acquisition of the then nearly 150-year-old shipper American President Lines (APL). Many analysts regarded it as an expensive acquisition, but it gave NOL access to APL’s network of logistics support, terminals, stacktrains and agencies in the US and abroad, as well as its well-developed assets and brand name as a shipper.16 In fact, after the acquisition, NOL operated under the APL name.17

As the acquisition of APL was funded through debt, and was completed amid the Asian financial crisis and an intermodal stacktrain crisis in the United States, NOL’s profits took a dive. From a profit of S$16.9 million in 1996, the carrier sank to losses of S$301.7 million and S$438.3 million in 1997 and 1998 respectively. To turn the company around, NOL sold its US stacktrain service generating a profit of US$167 million in March 1999, and launched a US$500 million international share placement in May 1999. By 1999, NOL was again profitable and saw record profits of US$178.5 million the following year.18

However, the profitability did not last long: A cyclical downtown in 2001 led to a plunge in freight rates, which in turn pushed the shipping industry into a recession. As a result, the company recorded its worst-ever results with a net loss of US$330 million in 2002. To deal with the massive losses, NOL decided to exit the tanker market by divesting AET, and go back to its core business of liner and logistics. It also kept a tight rein on costs and yield management. In 2003, NOL returned to profitability with a record US$429 million gain.19 A year later, Temasek Holdings launched a bid to take the carrier private. However, the attempt failed as it was only able to increase its stake to 69 percent, falling short of the required 90 percent.20

In July 2008, NOL explored the possible acquisition of competitor Hapag-Lloyd with a non-binding offer estimated at around US$7 billion, but pulled out of the acquisition process a few months later.21 NOL’s share prices surged after the news as there had been fears of overpaying for the potential acquisition.22

However, NOL’s performance was affected by the 2008 global financial crisis. After registering a profit of US$83 million in 2008, the carrier swung into a record loss of US$741 million in 2009. The company attributed the losses to a worldwide decline in shipping demand and falling freight rates due to the global economic downtown.23 In June 2009, NOL announced plans for an S$1.44 billion rights issue, with about half to be used to repay debts and the rest for investments and working capital.24

Recent developments

Although NOL returned to profits in 2010, earning US$460 million that year, the sluggish recovery in the global economy dragged the carrier back into the red for a protracted period from 2011 to 2014.25 In 2015, Temasek announced its decision to sell its entire stake in NOL to France’s CMA CGM, the world’s third-largest container shipper, in an S$3.4 billion deal.26 At the time of the sale, the shipping industry was facing volatility marked by various challenges ranging from record low freight rates to massive over-capacity. The deal was cast as a strategic move: NOL could leverage on CMA CGM’s global position to maintain its relevance in the industry, and to gain key competitive advantages. These include “optimisation of vessels and occupancy rates on routes [and] economies of scale in terms of purchasing costs, logistics costs and chartering costs”efficient.27


Alvin Chua & Lim Tin Seng

1. Elias, R. (2004). Beyond boundaries: The first 35 years of the NOL story. Singapore: Neptune Orient Lines, pp. 8, 17. (Call no.: RSING 338.7613875095957 ELI)
2. Neptune Orient Lines. (n.d.). Core business. Retrieved 2016, March 18 from Neptune Orient Lines website:
3. Rumi Hardasmalani. (2015, December 7). Temasek to sell entire NOL stake for S$2.3b. Today. Retrieved from Factiva via NLB’s eResources website:
4. Elias, R. (2004). Beyond boundaries: The first 35 years of the NOL story. Singapore: Neptune Orient Lines, pp. 3, 8, 17. (Call no.: RSING 338.7613875095957 ELI)
5. Elias, R. (2004). Beyond boundaries: The first 35 years of the NOL story. Singapore: Neptune Orient Lines, pp. 10, 15, 17, 30. (Call no.: RSING 338.7613875095957 ELI)
6. Joseph, G. (2005, October 4). NOL’s first MD Sayeed passes away at 95. The Business Times, p. 21. Retrieved from NewspaperSG.
7. Elias, R. (2004). Beyond boundaries: The first 35 years of the NOL story. Singapore: Neptune Orient Lines, pp. 19, 21. (Call no.: RSING 338.7613875095957 ELI)
8. Elias, R. (2004). Beyond boundaries: The first 35 years of the NOL story. Singapore: Neptune Orient Lines, p. 21. (Call no.: RSING 338.7613875095957 ELI)
9. Elias, R. (2004). Beyond boundaries: The first 35 years of the NOL story. Singapore: Neptune Orient Lines, pp. 22–25. (Call no.: RSING 338.7613875095957 ELI)
10. Elias, R. (2004). Beyond boundaries: The first 35 years of the NOL story. Singapore: Neptune Orient Lines, pp. 30, 37, 39. (Call no.: RSING 338.7613875095957 ELI)
11. Elias, R. (2004). Beyond boundaries: The first 35 years of the NOL story. Singapore: Neptune Orient Lines, pp. 41–42. (Call no.: RSING 338.7613875095957 ELI)
12. Elias, R. (2004). Beyond boundaries: The first 35 years of the NOL story. Singapore: Neptune Orient Lines, pp. 45–46, 51–52. (Call no.: RSING 338.7613875095957 ELI)
13. Elias, R. (2004). Beyond boundaries: The first 35 years of the NOL story. Singapore: Neptune Orient Lines, p. 67. (Call no.: RSING 338.7613875095957 ELI)
14. Hsung, B. H. (1988, July 8). Temasek reduces stake in NOL. The Straits Times, p. 21. Retrieved from NewspaperSG.
15. Elias, R. (2004). Beyond boundaries: The first 35 years of the NOL story. Singapore: Neptune Orient Lines, pp. 73, 81, 83. (Call no.: RSING 338.7613875095957 ELI)
16. Elias, R. (2004). Beyond boundaries: The first 35 years of the NOL story. Singapore: Neptune Orient Lines, pp. 83–84. (Call no.: RSING 338.7613875095957 ELI)
17. Chan, F. (1997, November 7). NOL to form new global alliance with APL merger. The Business Times, p. 29. Retrieved from NewspaperSG.
18. Elias, R. (2004). Beyond boundaries: The first 35 years of the NOL story. Singapore: Neptune Orient Lines, pp. 89, 91–92. (Call no.: RSING 338.7613875095957 ELI)
19. Elias, R. (2004). Beyond boundaries: The first 35 years of the NOL story. Singapore: Neptune Orient Lines, pp. 92, 99, 103. (Call no.: RSING 338.7613875095957 ELI)
20. Temasek owns 69% of NOL as offer ends. (2004, September 30). Today, p. 22. Retrieved from NewspaperSG.
21. Chan, R. (2008, September 30). NOL confirms binding bid for Hapag-LloydThe Straits Times, p. 42. Retrieved from NewspaperSG.
22. Chan, R. (2008, October 14). NOL shares surge on end of courtshipThe Straits Times, p. 41. Retrieved from NewspaperSG.
23. Neptune Orient Lines. (2010, February 11). NOL reports 2009 net loss of US$741 million [Press release]. Retrieved 2016, March 15 from Neptune Orient Lines website at:
24. Chan, R. (2009, June 3). NOL plans $1.44b rights issueThe Straits Times, p. 40. Retrieved from NewspaperSG.
25. Neptune Orient Lines. (n.d.). Financial highlights. Retrieved 2016, March 18 from Neptune Orient Lines website:!ut/p/z1/pZBBD4IwDIV_Dde1CirxhoiKicKFgLsYMHOQACPblL_v0KOKB3to0uZ97zUFChnQNr9XPNeVaPPazCc6P7ueg1vfwR2GpofBauMfD_7UiSeQjgmixAb6B4_B4i9-EAw8fikPDU_HIp4X_PIYdYjWM9gD5bUoXv_02sJ2OVDJrkwySW7SrEutO7W00MK-7wkXgteMXERDFLfwE1UKpSF7E0PXJEmGVdykrnoANoOA8w!!/dz/d5/L2dJQSEvUUt3QS80TmxFL1o2XzhBNDBHQzQwSDBJQzQwSUVCRkNOTUMyNFAx/
26. Rumi Hardasmalani. (2015, December 7). Temasek to sell entire NOL stake for S$2.3b. Today. Retrieved from Factiva via NLB’s eResources website:
27. Neptune Orient Lines. (2015, December 7). CMA CGM to acquire NOL, reinforcing its position in global shipping [Press release]. Retrieved 2016, March 18 from Neptune Orient Lines website:!ut/p/z1/tVJNc8IgEP01ORqo5IP0lmbUWqv2Y6KGi0MSTNIhEAPV9t-XtMfWOM5YDgwLbx9v3y4gYAOIoIeqoLqSgnITJ8Tb4tCBk8iB93Bq9unobhwt5tFwNvbBug8ARz4gp5-XT6g_v_ugy4cnVgjBChBAMqEbXYJESK5K2rI8k0IzoXmVWlDpQSbrWgpzpIOmZUq1jDOqmLIg9nAwdCF0aB74Xo4wy4LdLmBBnvm5H-COvcmqHCRnkQ99pXaVGC-rt_2ehEZwp-9Dg80_KF53mvtN7weEXj_gu6vn-mLcKLhMf0YoFCnCBSAt27GWtfZ7a65LrRt1a0ELHo9Hu5Cy4Mw2dduqsOBfWaVUxrFfYJCYEfK3q8cIexM0957xKoDTm1kcL2eRG2IfvF7QxX6yJboimQOvSeZdk8y9iKyp47jGyOWHZvSCPxE_1PV2sRjQFEPkNsUX3yLolw!!/dz/d5/L2dBISEvZ0FBIS9nQSEh/

The information in this article is valid as at 2016 and correct as far as we are able to ascertain from our sources. It is not intended to be an exhaustive or complete history of the subject. Please contact the Library for further reading materials on the topic.


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