OOCL’s first-quarter operational numbers not only confirm the unflagging colossal profitability of the liner industry, but also reveal the Hong Kong-based carrier’s aggressive market share grab on the Asia-Europe tradelane.
The Cosco Shipping subsidiary is the first carrier to publish its Q1 volumes and revenue, and its very strong freight performance is likely to be a harbinger for cumulative profits in excess of the record estimated $52bn return earned by the industry in the previous quarter.
The combined net profit for Cosco and OOCL in Q4 was $3.3bn, and the China state-owned line has already indicated it expects a profit of $4.3bn for the first quarter of this year.
OOCL’s liftings for Q1 were down 9.2% on the same period of last year, at 1,795,876 teu, although, as noted by Vespucci Maritime’s Lars Jensen, volumes in Q1 21 were particularly strong, driven by pandemic lockdown e-commerce demand.
Mr Jensen suggested instead that a fairer comparison should be drawn with the pre-pandemic carryings of Q1 19, which would show an increase in OOCL’s volumes of 12% – around twice the average growth for the industry.
“Asia-Europe volumes were up 25% on Q1 19,” said Mr Jensen, “hence OOCL has materially strengthened its foothold in this trade during the pandemic period,” he said.
In its 2021 annual report, OOCL’ parent Orient Overseas (International) said OOCL had been able to access additional capacity “through our ability to share equipment, or the option to take additional space on Cosco Shipping’s vessels”.
Mr Jensen also observed that the carrier’s transatlantic volumes were down 13% (compared with the same period of 2019), noting that the line had “been reducing its position in this trade”.
Meanwhile, OOCL’s unaudited revenue was up a staggering 71%, to $5.16bn, versus $3.02bn the year before, smashing its turnover record for the third consecutive quarter.
Average revenue across its four regional sectors – the transpacific, Asia-Europe, transatlantic and intra-Asia/Australasia – including both headhaul and backhaul legs, came in at $2,873 per teu, up 88% on the previous year.
On the transpacific, OOCL recorded an average rate per teu of $3,964, for Asia-Europe it was $3,761 per teu, for the transatlantic $2,956 per teu and for the intra-Asia and Australasia services, the average was $1,783 per teu.
Parent OOIL said the result was achieved “despite severe congestion around the network” and a load factor on its vessels 2.6% below the same period of 2021.
In its annual report it was positive for performance for the first half of this year, but due to the “uncertainty of market trends”, forecasting beyond the first six months had “become even more difficult”.
Cosco, including OOCL, currently ranks as the world’s fourth-largest carrier, behind MSC, Maersk and CMA CGM, with a total capacity of 2.9m teu on 474 vessels. Its combined orderbook stands at 34 ships, for 586,672 teu, of which 22 new vessels of 436,000 teu are slated for the OOCL brand.
Source: theloadstar.com