A successful shipping mogul’s two cents worth on running a tight ship and why going local is the way to go
After spending several boom years racing across the world’s oceans , hulking carrier ships have since swung idly on their anchors, waiting for cargo. The global financial crisis of 2007 has hit the global shipping industry particularly hard, knocking down shipping volume, freight and charter rates, and even leading to the cutting down of marine employment the world over.
“When the crisis hit, a lot wanted out of the shipping business,” shares Eugenio “Jun” Ynion Jr., Chairman of Le Soleil Shipping Agencies, Inc., the exclusive shipping agent of Zim Lines and Gold Star, both world leaders in the shipping industry. “There was no import, export was weak and a lot of shipping owners got buried in debt. They had projected that market size and volume would go up so they ordered a lot of vessels. Nung bumagsak ang ekonomiya, the vessels would leave empty.”
While most shipping owners saw this as the downfall of the shipping industry and has since jumped ship, Ynion saw the economic downturn as an opportunity to capitalize on his shipping company. “We started off as a shipping agency, and on the first month, negative agad,” shares Ynion. “My partners were telling me to shut the business down, but I said that we just have to wait.”
Lean and Mean
Running a tight ship of select employees, Ynion braved the crisis by becoming very conscious of the bottom line. “It really has a lot to do with having the right people,” he says. “In shipping, you get to appreciate that the only asset you have is not the volume of products, or even the office you have. Even if you have the right product and good infrastructure, if the people you hire don’t even care about your business, you’ll see all of that go down the drain.”
Establishing a lean and mean organization clearly worked. “Four months after the crisis hit, sales slowly picked up, and today, we’ve tripled our sales,” Ynion shares.
It turns out Ynion happened to be no stranger to surviving economic downturns. When the Asian financial crisis was at its height in ’98, he had just started a business called Index Crafts, Inc., which manufactured and outsourced handicrafts for export to Europe and the United States. In order to survive, he cultivated very good relations with his clients and suppliers. Despite the Asian crisis, he was still able to post annual sales of around $1.2 million.
On Changing Mindsets
Success really has a lot to do with a person’s outlook, Ynion says.
“Right now, there is imbalance of trade—import is thrice as much as export. Most of our shipping income is import talaga. But you also have to find ways to survive using export and it has a lot to do with how people think,” he says.
“The truth is the opportunity is here,” asserts Ynion. “When I started Le Soleil, my peers were saying, ‘Ano, papasok ka sa shipping? Baka malugi ka dyan! (What? You’re entering the shipping business?
You might get a bum deal!) They’re always raising cows—baka ganito, baka ganyan (what if this or that happens)—if that’s all you hear, you’ll definitely be tempted to quit and just be an employee. But if you have the skills and the resources you can use for business, then take advantage of the opportunity. Diversify. Do it.”
Take it from somebody who has a sneak peek into the future of the economy.
“Running Le Soleil—by looking at what comes in, I can plot out what sectors are expanding, and how the economy will go,” says Ynion. “While we do need to import some things, the ones we can produce ourselves, we do here. The main reason we import so much is because we want the easy way out—the short cut. But if we can just find a way to produce goods here, to do it ourselves, export will grow.
That’s really our challenge in the Philippines. The opportunity is here, not outside the country.”
Published in Manila Bulletin’s Business Agenda section. July 12, 2010