Shipping operation of Northern Shipping Joint stock Company

Shipping operation of NOSCO

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I. Overview about Northern Shipping Joint stock Company
1. History and Development progress
Northern Waterway Transport Corporation (hereinafter referred to as
NORWAT), the precursor of Northern Shipping Joint stock Company
(hereinafter referred to as NOSCO), was established on the Decision No.
1108/QĐ-TCCB-LĐ dated June 3
rd
1993 issued by Minister of the Ministry of
Transport. At that time, NORWAT was directly under Vietnam Inland
Waterway Administration.
NORWAT became a member of Vietnam National Shipping Lines
(hereinafter referred to as VINALINES) according to the Decision No. 598/TTg
dated July 30
th
1997 issued by Prime Minister. Then it was renamed to Northern
Shipping Company on the Decision No. 219/QĐ-HĐQT dated April 1
st
2004
issued by General Director of VINALINES. In November 28
th
2006, Minister of
the Ministry of Transport approved the plan of transforming Northern Shipping
Company into Northern Shipping Joint stock Company (NOSCO) on the
Decision No. 2581/QĐ-BGTVT.

In July 8
th

2007, after an experiment period of privatization, NOSCO
arranged the opening turn of Shareholders’ Meeting and completed the
procedure for starting the business. Since August 1
st
2007, NOSCO has
officially started to operate as a joint stock company.
Shipping operation of NOSCO

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2. Personnel structure
















Đại hội đồng cổ đông
Hội đồng quản trị
Ban Tổng giám đốc

Ban Kiểm soát
Văn
phòng
HĐQT
Văn
phòng
TGĐ
Phòng
TCCB-
LĐ
Phòng
Kinh tế
đối
ngoại
Phòng
Tài
chính
kế toán
Phòng
Vật tư
Phòng
Kỹ
thuật
Phòng
Pháp
chế - an
toàn
Văn
phòng
Đảng

đoàn
Công ty
cổ phần
Thương
mại &
Vận tải
Biển
Bắc
Công ty
TNHH
1 thành
viên
ĐT-CƯ
nhân lực

Nosco
Công ty
TNHH
1 thành
viên
XNK
Đông
Phong
Xí
nghiệp
Vận tải
thủy
Nosco
Quảng
Ninh

Công ty
CP Vận
tải Biển
Bắc chi
nhánh
tại Hải
Phòng
Trung
tâm
xuất
nhập
khẩu
CKD
Trung
tâm Du
lịch và
Thương
mại
Hàng
hải
Trung
tâm
Thuyền
viên
Xí
nghiệp
xây
dựng và
sửa
chữa

tàu biển
Nosco
Phòng
Đóng
mới
Nhà máy
sửa chữa
tàu biẻn
Nosco -
Vinalines

Ban
quản lý
các dự
án công
ty
Source: nosco.com.vn
Shipping operation of NOSCO

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3. Operations and Businesses
3.1. Shipping and other Maritime services
3.1.1. General information
Operating as a shipping company, it is obvious that shipping plays the
most important role in all NOSCO’s business activities. Recently, shipping
alone often accounts for more than 70 percent of NOSCO’s annual revenue.
In its very first days, NOSCO focused on inland transportation by running
old and small steamers on familiar local routes. After a couple of years, as this
activity could not earn enough for the whole staff, NOSCO soon decided to shift

its focus from inland operation to maritime transport. It also started to manage
other maritime services with the purpose of supporting fully and adequately for
shipping activities as well as making more profit to improve the living standard
for its staff.
The following are some NOSCO’s major maritime services, not to
mention the main function of Shipping/Maritime transport, at the moment:
 Ship owning, Ship management and Ship operation
 Ship brokering and chartering, Ship sale and purchase
 Ship repairing
 Shipping agency and Container services
 Logistics services
3.1.2. Fleets
NOSCO’s current fleet consists of 11 General Cargos and Bulk Vessels
trading on international routes.
 Deadweight tonnage (hereinafter referred to as DWT)
DWT is a measurement of total contents of a ship including cargo, fuel,
crew, passengers, food, and water aside from boiler water. It is expressed in
long tons of 2,240 pounds or an equivalence of 1,016.05 kilograms.
Shipping operation of NOSCO

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11 NOSCO’s vessels have the total DWT of around 230,000 MT, which
is estimated to be fourth biggest within VINALINES. Of those vessels, five of
them have the shipping capacity of more than 20,000 MT each. The biggest
vessel of NOSCO is MV NOSCO GLORY with its DWT reaching 68,591 MT.
The smallest one is MV NGOC HA whose DWT is 3,760 MT.
Seq. Ship Year/place built
Ship type DWT GT NT
1 MV QUOC TU GIAM 1985/Japan Dry cargo 7,015 5,512 2,223

2 MV THIEN QUANG 1986/Japan Dry cargo

6,130 4,096 2,212
3 MV LONG BIEN 1989/Japan Dry cargo

6,846 5,506 2,273
4 MV EASTERN SUN 1993/Japan Dry cargo

22,201 13,706 7,738
5 MV EASTERN STAR 1994/Japan Dry cargo

23,724 14,431 8,741
6 MV NOSCO GLORY 1994/Japan Bulk carrier 68,591 36,074 23,452
7 MV NOSCO VICTORY 1996/Japan Bulk carrier 45,585 26,060 14,872
8 MV NOSCO PEACE 2003/Japan Bulk carrier 26,384 15,850 9,110
9 MV NGOC HA 2004/Vietnam Dry cargo

3,760 2,498 1,462
10 MV NGOC SON 2004/Vietnam Dry cargo

6,500 4,095 2,448
11 MV HONG LINH 2007/Vietnam Dry cargo

12,500 8,280 3,985
(Sources: nosco.com.vn and Introduction Catalogue)
 Gross tonnage and Net tonnage (hereinafter referred to as GT and NT)
GT is a measurement of total capacity expressed in volumetric tons of
100 cubic feet or an equivalence of 2.831 cubic meter. It is calculated by adding
the under-deck tonnage and the internal volume of twin-decks and deck space
used for cargo. The measurement is used in assessing harbor dues and canal

transit dues for merchant ships.
Shipping operation of NOSCO

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NT is the tonnage of a vessel after a deduction from the gross tonnage has
been made, to allow space for crew, machinery, etc. The measurement is
applied in assessing port-authorities-related dues.

(Source: shipbuilding.net)
NOSCO fleets’ total GT and total NT are approximately 38,500,000
cubic meter and 22,230,000 cubic meter respectively. Individual figures
basically follow the order of DWT. It means that MS NOSCO GLORY has
biggest figures with its GT and NT respectively standing at around 10,200,000
cubic meter and 6,650,000 cubic meter while the smallest one is MV NGOC
HA with around 700,000 cubic meter of GT and 415,000 cubic meter of NT.
 Average age
At the moment, 11 vessels of NOSCO has the average age of 15.1 years.
It is considered a fairly old average age for a fleet. Among those vessels, three
of them were constructed in 1980s with the oldest one MV QUOC TU GIAM
Shipping operation of NOSCO

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being built in 1985. Four vessels were built in 1990s and the rest four were
constructed during 2000s. The youngest vessel is MV HONG LINH, which was
built in 2007.
3.2. Other businesses
Aside from shipping operation and maritime services, NOSCO is
operating in some other services. Despite their minor contribution to company’s
annual turnover, these operations are very important for NOSCO to develop

sustainably, create more jobs and assure a good payment for the staff. Some of
these operations are:
 Multi-modal transportation
 Passenger carrier by inland waterway, road and seaway
 Import and export material, steel cargo, apparatuses, etc.
 Consign sale and purchase; and consign agency
 Concrete and commercial manufacture
 Labor export
 Tourism services
 Real estate business
 Guest house services (stay and office for lease)
4. Analysis on the competition
Globally, as shipping is an enormous business, NOSCO definitely have to
compete with a numerous number of other shipping companies around the
world, especially on its familiar routes. Considering the world scale, NOSCO’s
contribution to world shipping industry is very little.
However, since NOSCO is a member of VINALINES, whose shipping
volume accounts for the major part of Vietnam annual shipping volume,
NOSCO could be considered one of the biggest shipping company in Vietnam.
It is obvious that NOSCO’s domestic competitors are mostly other shipping
companies belonging to VINALINES. As mentioned above, NOSCO owns the
Shipping operation of NOSCO

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fourth biggest fleet within VINALINES, led by the fleets of Vietnam Ocean
Shipping Joint stock Company (VOSCO), Vietnam Petrol Shipping Joint stock
Company (FALCON) and Vietnam Sea Transport and Chartering Joint stock
company (VITRANSCHART). Other competitors from VINALINES are Dong
Do Marine Joint stock Company (DONG DO), VINASHIP Joint stock

Company (VINASHIP), etc.
Apart from internal competitors, NOSCO has many domestic rivals
outside VINALINES. Those potential rivals might come from Vietnam
Maritime University (like Eastern Dragon Shipping Company - EDS), directly
under Ministry of Transport (like The Transport and Chartering Corporation –
VIETFRACHT) or formerly belong to VINASHIN (like Bien Dong Shipping
Company).

















Shipping operation of NOSCO

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II. The shipping operation of NOSCO
1. Real situation at NOSCO

1.1. Business results in recent years (2007-2010)
1.1.1. Shipping volume
 There are two indexes measuring shipping volume. They are:
 Transport volume
Transport volume is a figure showing the actual amount of goods shipped
annually. In order to calculate a company’s shipping volume, we just simply
add up the transport volumes of individual vessels in that year.
Unit of measurement: Ton or T in abbreviation
 Rotation volume
Rotation volume of a vessel for each journey is calculated by multiplying
the amount of goods shipped with the voyage length. Therefore, rotation
volume of a vessel in one year is the sum of all single rotation volumes of that
vessel during that year. Summing up all individual vessels’ rotation volume in
one year we will have the company’s rotation volume for that year.
Unit of measurement: Ton x Kilometer or TKm in abbreviation
 NOSCO’s figures:
Year
Content Unit Planned Actual Fulfillment
Growth
index

2007
Transport volume T 1,010,000
Rotation volume TKm 3,045,000,000

2008
Transport volume T 1,300,000 129%
Rotation volume TKm 6,302,523,000 207%

2009

Transport volume T 2,407,000 2,381,000 99% 183%
Rotation volume TKm 10,481,000,000 10,461,000,000 99.8% 166%