Thursday, September 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

Star Bulk Announces the Repurchase of 10 Million of Its Common Shares

Star Bulk announced that it entered into a Repurchase Agreement (with OCM XL Holdings, LP, a limited partnership incorporated in the Cayman Islands, pursuant...

Trafigura announces executive leadership changes

Trafigura Group Pte Ltd. has announced an evolution of its executive team to further strengthen leadership and focus across its global activities during a...

Woori, HMM, KOBC to buy Polaris in prospective $448 mln deal – report

Polaris Shipping Co. is poised to sell its entire stake at around 600 billion won ($447.5 million) to Woori Private Equity Asset Management Co....

Pyxis Tankers Announces Closing of Ultramax JV Investment

Pyxis Tankers, an international shipping company, reported that on September 14, 2023, the Company closed on its previously announced newly formed drybulk joint venture...

Korea’s STX denies rumor that it is backed by Chinese fund

South Korean general trading company STX Corp. has said its largest shareholder is a local investment firm, while refuting the false reports appearing through...

Baltic index scales 11-month peak on strong capesize rates

The Baltic Exchange’s main sea freight index, which tracks rates for ships carrying dry...

Baltic index scales over 9-month high on capesize surge

The Baltic Exchange’s main sea freight index, which tracks rates for ships carrying dry...

Baltic index rises to over 4-month high on stronger capesize rates

The Baltic Exchange’s main sea freight index, which tracks rates for ships carrying dry...

Houston-Japan VLGC freight rates reach multi-year high

VLGC freight rates from Houston to Chiba, Japan, reached $245/mt Sept. 21 for the...

Baltic index snaps 11-session rally as rates for larger vessels ease

The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk...

Drewry: Port Throughput Index Down 2.1% in July

The Global Container Port Throughput Index fell 2.1% MoM in July 2023, with the small rises recorded in Africa and Oceania having been insufficient...

Vopak: Agreement with Infracapital on sale of Rotterdam chemical terminals

Vopak announces that it has reached an agreement with Infracapital on the sale of its three chemical terminals in Rotterdam (Botlek, TTR and Chemiehaven)...

Port Hedland Iron Ore Exports Edge Up 4% in August

Pilbara Ports Authority has delivered a total monthly throughput of 62.8 million tonnes (Mt) for August 2023, consistent with the August 2022 throughput. The Port...

Thessaloniki, Gdańsk ports to explore synergies

Thessaloniki Port Authority S.A is expanding its role as a port of international importance through a new cooperation with the Port of Gdańsk Authority...

Hapag-Lloyd CEO: Counteroffer for HHLA would not be in our interest

Hapag-Lloyd CEO Rolf Habben Jansen said on Thursday that it would not be in the container shipper’s interest to make an offer for HHLA...