Sunday, May 28, 2023
HomeContainersOOCL Proves Carriers Can Still Perform in Softer Market

Subscribe

To our FREE newsletter
Get all the latest maritime news delivered straight to your inbox.

OOCL Proves Carriers Can Still Perform in Softer Market

Ocean carrier average rates per teu appear to have plateaued in the second quarter, as contract rate increases are negated by tumbling spot rates, which can represent around half of their business.

The first glimpse of how carriers performed in Q2 is provided by the operational results for OOCL: a surge in revenue but a decline in cargo carried, in spite of higher fuel costs.

OOCL’s revenue surged 52.4% on the same period last year to a new high of $5.3bn, despite a 5.6% decline in liftings to 1,839,050 teu, mainly due to higher rates obtained in long-term contract deals.

This resulted in an average rate of $2,874 per teu for Q2, which is, interestingly, on a par with its average for Q1, suggesting carrier earnings may now have peaked.

OOCL’s parent, OOIL, said: “This record result was achieved despite severe congestion around the network,” adding that congestion had reduced “loadable capacity by 6.1%” as its vessels were idled at ports around the world.

This was particularly felt on the transpacific, where chronic congestion at US west coast ports and, more recently on the east coast, saw OOCL carryings decline by 12.1% on Q2 21, to 474,851 teu.

Due to the commencement of new annual contracts on the transpacific featuring the significantly higher rates, OOCL’s revenue on the tradelane soared by 73.7%, to $2.1bn, for an impressive average rate of $4,365 per teu.

However, spot rates on the route have been in freefall in past weeks, shedding some 20% last week alone, to go below $4,000 per teu and putting newly agreed contracts at risk of default.

Meanwhile, on the Asia-Europe tradelane, OOCL’s revenue was up 36%, to $1.39bn, while its liftings declined by a modest 1.9%, to 402,836 teu, despite congestion at North European container hubs.

This could be explained by the fact that OOCL and OOIL are subsidiaries of Cosco and part of the Ocean Alliance vessel-sharing group, which has been more prepared than the 2M, and especially THE Alliance, to skip ports in North Europe in favour of a hub and spoke relay operation, enabling vessels to return to China earlier to reload.

On the transatlantic, OOCL’s revenue jumped 57.8% on the same period of last year, to $372,406, sourced from liftings of 112,300 teu, 8.5% below the previous year, for an average of rate of $3,316 per teu.

Spot rates between North Europe and the US east coast have soared in the past 18 months, from around $2,000 per 40ft to about $8,000 and, so far, have not shown the same signs of weakening as rates from Asia.

OOCL’s biggest region remains intra-Asia/Australasia, which recorded a 42.6% increase in revenue, to $1.45bn, from a 3% decrease in liftings, at 849,063 teu, for an average rate of $1,713 per teu.

The OOCL quarterly operational update is a traditional bellwether for other ocean carrier financials to be published in the coming weeks.

Source: TheLoadstar.com

Related Posts

Video

Finance & Economy
Shipping News
Ports

Seanergy ‘well positioned to benefit from positive trend in Capesize market’

Seanergy Maritime Holdings Corp., announced its financial results for the first quarter ended March 31, 2023, and declared a quarterly dividend of $0.025 per...

Dorian LPG sees Q1 revenue more than double year-on-year

Dorian LPG reported its financial results for the three months and fiscal year ended March 31, 2023. Highlights for the Fourth Quarter Ended March 31, 2023 Revenues of $133.6 million.Time...

Navios Holdings Posts $14.5 Mln Net Income in Q1

Navios Maritime Holdings Inc., reported its financial results for the first quarter ended March 31, 2023. Navios Holdings owns (i) a controlling equity stake...

BW LPG posts ‘strongest quarterly performance on record’

BW LPG has recorded its ‘strongest quarterly performance on record’ in the first three months of 2023. The company was boosted by strong exports...

ONE, Wan Hai agree to pay civil penalties to FMC

Ocean Network Express (ONE) will pay a US$1.7 million civil penalty to avoid a formal investigation by the US Federal Maritime Commission (FMC) for...

Nikolaus H. Schües elected BIMCO President

BIMCO has elected Nikolaus H. Schües , CEO and owner of Reederei F. Laeisz,...

Baltic Dry Bulk Index Ends Worst Day In Over Three Months

The Baltic Exchange’s main sea freight index declined the most since mid-February on Thursday...

Maritime UK appoints new Chief Executive Officer

Maritime UK, the umbrella organisation for the UK’s maritime sector, has appointed Chris Shirling-Rooke...

Baltic dry bulk index extends slide for 10th straight session

The Baltic Exchange’s main sea freight index of shipping rates for dry bulk commodities...

Baltic index hits over two-month trough on lower rates across vessels

The Baltic Exchange’s main sea freight index slumped to its lowest level in over...

DP World Completes Terminal Expansion Project Vancouver Port

DP World has completed the AED954 million ($259.78 million) Centerm expansion project, increasing container throughput at the Port of Vancouver by 60 percent. The terminal...

DP World completes AED 954 million Vancouver port expansion

DP World and the Vancouver Fraser Port Authority have celebrated two historic events – the completion of the Centerm Expansion Project at DP World...

Alexandroupolis port gets 24 million euros of EU funding

Greece has secured 24 million euros ($26 million) in European Union funding to upgrade its northern Aegean Sea port of Alexandroupolis, privatisation agency HRADF...

Port Hedland Iron Ore Exports Down 5% in April

Pilbara Ports Authority (PPA) has delivered a total monthly throughput of 57.7 million tonnes (Mt) for April 2023. This throughput was a two per cent...

APM Terminals Reveals $1 Billion Investment in Brazil

APM Terminals’ CEO Keith Svendsen has pledged an investment of about US$1 billion in the company's Brazilian operations up to 2026. The amount includes around...