---HISTORY

On October 1, 1970, the Tianjin branch of COSCO Group was established in Tanggu, Tianjin. More than 60 cadres from various regions worked and lived in two small, crowded buildings, and the fleet consisted of only a dozen of general cargo ships from COSCO Guangzhou and 789 crew members. Since then, the whole team of onshore and offshore staff carried forward the spirit of hard work and dedication, and took up the heavy tasks of import and export, special-funded transport and foreign aid.

During the 1980s, with the deepening of China's reform and opening up, COSCO Tianjin’s fleet developed rapidly in terms of ship number, ship type and application of high and new navigational technology. In accordance with the needs of international shipping market, the company adjusted the structure of its ships, made great efforts to develop multi-purpose vessels and container ships, and launched more than 60 general cargo and container liner routes from China to Japan, Southeast Asia, the Mediterranean, Western Europe, the Americas and Africa. The punctuality rates of core container liners were maintained at 100 percent, a record which won praise from the State Council and the port authority of Tianjin. By 1990, COSCO Tianjin’s vessels had reached more than 700 ports in more than 100 countries and regions across the world, shipping 10 million DWT of freight every year. Meanwhile, the company strived for business diversification, and set up a number of shipping-related onshore subsidiaries, including Shipping Supply Company, Shipping Service Company and Freight Agency, etc.

During the 1990s, COSCO Tianjin strictly enforced the ISM rules and ISO90001 standards to enhance the company’s competitiveness in the international shipping market. In 1997, the company obtained the DOC Certification and ISO9001 Certification, becoming China’s first shipping company to win the two certifications. After the 15th National Congress of the Communist Party of China, in accordance with the requirements of modern enterprise system and the development strategy of COSCO Group, COSCO Bulk Transport Co., Ltd. moved to Tianjin from Beijing, and merged with COSCO Tianjin. On January 11, 1998, the new COSCO Bulk officially moved into Tianjin COSCO Plaza, and the company’s National Flag was raised by soldiers from the National Flag Guard in Tian’anmen Square. This indicated that COSCO Bulk had become a large specialized enterprise in the international dry and bulk shipping industry.

From the late 1990s, COSCO Bulk strictly adhered to and implemented COSCO Group’s strategy of “from owning ships to controlling ships.” In an attempt to reform the company’s development strategies, COSCO Bulk broke the original owner model, expanded the company’s access to market resources, and established a new shipping business model with the owner, the charterer and the broker. In this way, the company realized the strategic transformation from owning limited state-owned assets to controlling external market resources.

COSCO Bulk constantly looked for opportunities to rent modern ships that are competitive in the market and easy to resell, and to lease self-possessed ships that are of high costs and unreasonable forms. In light of changes in demand in the cargo transport market, COSCO Bulk replaced its capacity, and the structure of its fleets was gradually adjusted by a large number of chartered ships. The restructuring of fleets brought about adjustment of capacity. As the volume of freight traffic and traffic mileage by COSCO Bulk’s chartered fleets increased year after year, chartered vessels showed enormous comprehensive effects and the company’s profitability grew in geometric progression.

In 2007, COSCO Bulk further innovated its development philosophy, and promoted the strategies of resource introduction and resource integration. Through resource introduction, self-possessed resources and external resources were combined organically, and the strategy of “transform from owing and controlling to deploying social resources” was deepened. In that year, the company made a historical breakthrough in terms of capacity, traffic volume, revenue and profitability. On December 28, 2007, COSCO Bulk entered China COSCO, and became a core enterprise in COSCO Group’s capital platform. The company’s development entered a new stage.

Since 2008, dry and bulk cargo market saw unprecedented sharp fluctuation and non-rational decline caused by the financial crisis. COSCO Bulk gradually reached the common consensus on coping with the crisis and developing scientifically under the guidance of scientific outlook of development.

With respect to development strategies, it has emphasized on system innovation and high-efficient implementation, and has adjusted from “controlling of carrying capacity” to “controlling of cargo sources and carrying capacity”. Moreover, it has paid special attention to risk prevention and control, stabilization of cargo resources and development of high-quality customers.

With respect to operation strategies, it has insisted on market investigation first, skillfully used the model of “wave band operation and high-end lock”, grasped the decisive opportunities of the market and effectively avoided the market risks. It has seized the fluctuation features of the market, grasped the development speed, flexibly used many ship-leasing methods and adjusted the carrying capacity structure. By adjusting the high-rent vessels timely, it has seized the lowest point of the market and greatly reduced the costs of the rents.

With respect to cost management, it has comprehensively promoted the strategies of “broadening the sources of income and reducing expenditure” and “reducing the costs and increasing the earnings”. In 2009, the results of reducing the costs and increasing the earnings reached 1.5 billion yuan. In 2010, it has focused on hidden costs while strictly controlling the obvious costs. By deepening the measures such as enhancing financial budget, increasing comprehensive efficiency, improving single-vessel earnings and seeking for long-term development, it has expanded efficiency creation space and reduced the costs and increased the earnings by more than 300 million yuan.

Sticking to the path of sustainable development is an inevitable requirement for the business development of COSCO Bulk. In recent years, in order to optimize its strategic layout and improve its value chain, COSCO Bulk made great efforts to build overseas networks and expand development space. The company established operating companies in Europe, the Americas, Australia, Singapore and Indonesia, and set up service agencies in Japan and South Korea. COSCO Bulk has actively promoted the integration operation home and abroad. It has brought into full play the linkage function of overseas outlets, developed the regional markets in an in-depth manner, established the new mode with headquarters as the dominant, linkage operation of overseas outlets and 24 hours of continuous operation, so as to be close to the market and the customers.

Now COSCO Bulk owns more than 90 large-scale bulk vessels with 6 million DWT, including Capesize, Panamax and Handymax types. About 200 vessels are currently at disposal, with an actual capacity of over 19 million DWT. COSCO Bulks’ ships have reached more than 1,000 ports in more than 100 countries and regions, making the company a leader in the international dry bulk shipping market.

Over the years, COSCO Bulk has insisted on enhancing the basic management. In 2006, COSCO Bulk further determined the “standardization management year” to take the standardized management as the masterstroke of the year. By making use of the ideas, measures and methods of lean management, it has scientifically optimized the working processes of core businesses such as operation, decision-making, management, service and reform, improved the coordinative working ability, gradually realized the transformation from functional management into process management, transformed from the vision of manager to the vision of customers, and significantly improved the comprehensive management level of the enterprises. In March 2008, COSCO Bulk released and implemented the 6.0 version of comprehensive management system document, which makes innovative correction and improvements on original system. Since the comprehensive implementation of the new version of management system, it has further clarified the working obligations, cleared the working process and fulfilled the target of “improving working efficiency and elevating the scientific management level of land-based and vessels of the company.

At the same time, COSCO Bulk continued to promote management innovation. In order to adapt to the rapid development of the international shipping market, the company broke the traditional pyramid-like organizational structure in major business departments. In the shipping department, COSCO Bulk virtualized the operational structure in accordance with the different types and business functions of the fleets, and formed the Capesize fleet, Panamax fleet, Handymax fleet and Handysize fleet. On this basis, COSCO Bulk established a “virtual small fleet” consisting of employees from the shipping, engineering, crew management, and financial departments. Through regular meetings and occasional communication and cooperation, the departments exchanged information and worked together, which highlighted the new advantages of horizontal communication and coordination.

The level of ship management has a direct impact on the company’s profitability. Beginning in 1993, the company implemented the star-rating system for vessels, which moved COSCO Bulk’s (COSCO Tianjin) ship management capability onto a new level. In October 2003, with the change in vessel types, COSCO Bulk learned from advanced international experience, and implemented the policy of overall vessel supervision. In 2007, as the number of self-owned fleets continued to grow, to meet the needs of the fleet building, COSCO Bulk’s management authorities, again thinking ahead of time, proposed a new concept of ship management which organically combined star-rating vessel management with overall management system. This led to the release and implementation of Measures for the Implementation of Star-rating Vessel Management System of COSCO Bulk Transportation Corporation Limited. The new star-rating vessel management system followed the principle of organically combining star-rating vessel management with overall supervision, stuck to the principle of combination of qualitative and quantitative assessment, highlighted the effectiveness of incentives, won the support of the majority of crew members and mobilized their enthusiasm for work.

For shipping enterprises, safety management means development and basic guarantee. Over the years, safety has always been made the top priority of COSCO Bulk. Through protracted and unremitting efforts, the situation of safety management has always maintained a good momentum. Based on safety management situations of the company, COSCO Bulk has focused on management of source, trends and shortages, deepened the construction of long-term mechanism, improved the “star-rated system of vessel management” and established “three-layered responsibility system” and “supervision system” for safety management, which play a key role in continuing and stabilizing safety situations of the company.

Innovation in business models and management methods facilitated technological innovation in COSCO Bulk. And technological innovation, in turn, provided strong services and supports for the company’s production and operation, and become an important measure for the improvement of operational efficiency, management level and development quality. In recent years, COSCO Bulk made full use of information technology to improve its operation flows, developed a series of production, operation and resource management software, including the Production, Operation and Management Software System, Vessel SMIS System, COSCO Seafarer Information System (CSIS), and COSCO Bulk Standardized Management System Platform, COSCO Bulk Knowledge Management Platform, and Comprehensive Performance Management System, etc., and realized the automation of business processes, systematization of management methods, knowledge management networking and e-business operations. The company worked with International Business Machines Corporation (IBM) to develop the next-generation Business Management System (BMS). The company’s capacity of business operation was substantially improved after the implementation of the system.

For COSCO Bulk, a performance-oriented modern enterprise, the pursuit of ever-increasing corporate social values requires the support of solid profitability. Profitability, to a large extent, is reflected in a loyal and excellent staff team. Familiar with this rationale, COSCO Bulk has always upheld the people-oriented principle, insisted on innovative mechanisms for motivating and training staff to enable simultaneous growth of the enterprise and the employees, and to create a harmonious corporate culture integrating the two sides.

COSCO Bulk started with institutional innovation, and first adjusted the company's organizational structure. In accordance with the principles of "unified, streamlined and efficient," the company reformed its organization, reduced management layers, and realized the transition from pyramid-style management to flat, soft and network-based management. Secondly, guided by the principles of “market-oriented personnel selection, differentiation of incentive allocation, systemization of evaluation and assessment, and people-oriented daily management,” the company actively promoted the cause of quality cultivation, and built a group of high-quality staff members. Once there was a vacancy or a new position, the company would release public notice on its intranet, and all eligible employees could complete an application form. As of the end of 2008, the company has organized a total of 35 public recruitments for 233 positions which were participated by 712 people. Among them, 251 were recruited or promoted, which made the cadre team more professional and younger. In addition, the company launched a "Three One-hundred" talent project, and sent 5 groups, a total of 96 middle-level cadres to attend the Innovative Management MIA advanced training course in Tsinghua University, which effectively enhanced the theoretical knowledge and operational ability of the cadres. In terms of employee training, the company improved the quality of training through a variety of approaches, including group theory training, pre-job training, job exchanges training, overseas network training, online training, and employee self-training, etc. In terms of motivation and assessment, the company established the “broadband payment” system, reformed employees’ wage system, enacted the Comprehensive Performance Management System and Regulations for Management of Integrated Performance and Energy Integral", and further improved the long-term incentive mechanism.

As for the fleets, aiming at meeting the requirements of labor market both at home and abroad, the company implemented the strategy of optimized structure, classified management and “3 A” evaluation system for its more than 8,000 crew members. In recent years, COSCO Bulk focused on the establishment and improvement of overall seafarer training programs, effectively improved the overall quality of the crew members, and ensured the relative stability of the company’s safe production situation and the steady development of overseas labor service. In the Employee Skill Competition organized by COSCO Group in 2004, COSCO Bulk won 7 first prizes and 30 individual awards. It has held a skill contest for ordinary seafarers for two years in succession, in which the first prize winner in the final contest was awarded a labor contract on the spot and became a formal employee of COSCO Bulk. The contest aroused great interest among the seafarers, and fully demonstrated the effectiveness of quality cultivation.

In recent years, COSCO Bulk actively strengthened the capacity of its political commissar team. In accordance with the deployment requirements of COSCO Group for the strengthening of the building of the political commissar teams, the company assigned full-time political commissars on COSCO’s overseas vessels. At the same time, in accordance with the ideas of “broaden resources,” “clarify responsibilities,” “strengthen training,” and “tighten criteria,” the company formulated the Plan for the Building of Political Commissar Teams on Vessels, Plan for the Building of Party Branches on Overseas Vessels, and Manual for Political Commissars on Vessels, which won the inscription and encouragement of Zhang Fusheng, Secretary of the Party of COSCO Group. On this basis, the company made greater efforts in the selection and training of backup political commissars, optimized the structure of the political commissar team and improved the quality of the political commissar team.

Over the 30 years, COSCO Bulk addressed itself to the problem of both material as well as cultural and ideological progress without any letup. It managed to do a good ideological and political work among the onshore and offshore employees, and provided powerful ideological guarantee and spiritual forces for the reform and development of the company.

The company educated and guided the employees, armed the minds of onshore and offshore staff with the new ideas of market economy, and used the theory to guide practice—this was a long-term effort on the part of the company. On account of the employees’ ideological obstacles in the process of emancipating the mind and striving for innovation, of their ideological concerns in the process of deepening the reform, the company managed to grasp the ideological pulse of the employees, and guided them towards the concepts of market and profitability, towards enhanced awareness for potential problems, competition and development. As a result of the employees’ ideological changes, the company maintained a positive, up-and-coming mental state. It also promoted reforms in aspects that involved the employees’ interests, such as the company’s institutional, personnel and distribution systems, so as to maintain a stable workforce. As for the vessels, the company always adhered to the good tradition of “building Party branches on vessels,” brought into full play the forces of Party branches on vessels, and continued to innovate the ideological and political work of vessels and to ensure the safety operation of vessels.

Over the years, COSCO Bulk continued to innovate the building of grass-roots party organizations, and brought into full play the advanced nature of CPC members. The Party Committee of the company focused on the structural optimization, expansion of organizational coverage, and improvement of organizational vitality. In practice, the responsibility system for Party building work was enhanced, and the central role of the Tasks for Cultural and Ideological Progress were brought into full play. The ideological and political work of party building was integrated as a formal part of the comprehensive management system, and the unification and standardization of the ideological and political work of party building were promoted. Party organizations at all levels carried out the Central Government’s document on the four advanced, long-term mechanisms, took a good grasp of the regular education of party members, and enhanced the vitality and vigor of grass-roots party building work.

Over the years, COSCO Bulk has taken the promotion of advanced and typical experiences as the effective carrier of promotional and ideological work and has tried to enhance the influences of promotional and ideological work. On one hand, it has build up the platform for growth of advanced models focusing on development of the enterprise and combining features of the era, and established the cultivation mechanism to help advanced models to distinguish themselves. On the other hand, it has explored the spiritual meaning of advanced models and brought their leading roles into full play. Xinshenghai Liner is a model vessel of COSCO Bulk. In 2009, it has promoted the cultivation of typical example of Xinshenghai Liner in an in-depth manner. The advanced experiences and typical measures of the liner have gone deep into people’s heart, and its demonstration and driving effects gradually appeared. In 2010, COSCO Bulk compiled and printed the A Collection of Advanced Management Experiences of Xinshenghai Liner and formed operable working model, thus effectively promoting the improvement of vessel and land-based management level.

In recent years, COSCO Bulk actively promoted the building of enterprise culture, and enhanced the soft power for enterprise development. Through the promulgation and implementation of Guiding Principles for Corporate Culture, Guidelines for Operation and Management, and Staff Code of Conduct, the company established a corporate culture system integrating “concepts, systems and behaviors,” On this basis, the company carried out a series of cultural construction projects, including innovative culture, safety culture, executive culture, cultural harmony, and honesty culture, etc. In the construction of innovative culture, the concept of innovation has been internalized among the employees, and many innovative initiatives have borne fruit. In the building of safety culture, in building a safety culture, the safety awareness of employees has improved significantly and good safety habits have been strengthened substantially. In the construction of executive culture, the company, from top to bottom, has ensured that all discussions were resolved, all resolutions were carried out and all work achieved substantial results. In the construction of harmonious culture, the company created a cultural atmosphere of “building together, and sharing together,” and ensured the stability and harmony of the enterprise through the activities of “Sending Warmth,” helping the poor, and investigating and resolving all conflicts. In the construction of honesty culture, the company promoted the ideas that “people’s safety is the top priority,” and “achieve the preservation and increase of the value of state assets and state-owned asset operator at the same time," and strengthened the sense of honesty and hard work of the business operators.

Over the years, a great number of outstanding employees and exemplary teams have merged from and were cultivated at COSCO bulk delivery stations. Among them were National Model Workers Lu Hongfei, Zhang Guoyong, Zhang Liang and Xu Zunwu, winners of National May 1st Labor Medalists Ge Mu, Xing Xiqing and Cai Xuecheng, Fu Pinjie, a political commissar who won the title of “Outstanding Corporate Ideological and Political Worker of China,” Guo Chunhui, a crew member who sacrificed his life in Ukraine to protect state property and Zhao Hongbo, an employee who saved crew members from ship fire with complete disregard for his own personal safety. A number of exemplary ships were praised by authorities. Among them were Haimen Ship, Dengyun Ship, Tianmushan Ship, Tuohai Ship, Manhai Ship, Xinshenghai Ship, etc. In 1986, 1991 and 1997, respectively, the company’s Shijingshan Ship, Yongmen Ship and Fuqingshan Ship received orders to go to Yemen, Somalia and Congo where flames of war were raging everywhere. There, they rescued more than 300 embassy staff and foreign-aid experts under gunfire and chaos, and were praised by the Ministry of Foreign Affairs and the Ministry of Transport. The company was awarded a number of titles, including "National May 1st Labor Award", "National Outstanding Enterprise for Ideological and Political Work,” “National Exemplary Company for Social and Cultural Progress,” “National Model for Social and Cultural Progress,” “National Model for Enterprise Information Work", "Model Group Among Central Enterprises,” “National Model in the Building of Transportation Industry with Social and Cultural Progress,” “China’s Top 100 Enterprises with Excellent Management,” “Outstanding Enterprise of Tianjin,” “Industrial Model for Social and Cultural Progress in Tianjin,” “Tianjin’s Top 100 Enterprises,” Model for Ideological and Political Work in Tianjin,” and “Model for Safety and Security,” etc. The company’s employees were awarded the titles of “National Model Worker,” “National May 1ST Labor Medal”, “National New Long March Shock Worker,” “National Technical Expert,” “Skilled Young People in Transportation System” and other honorary titles.