Shipping companies report mixed results
Oct-31-2012 By : agxadmin
Three of China’s largest shipping companies posted mixed third-quarter results with China Cosco Holdings posting a CNY1.53 billion net loss, while two subsidiaries of rival China Shipping reported net profits. China Cosco plunged deeper into the red with a CNY6.4 billion net loss in the first nine months of this year which reflected poor container shipping and dry bulk markets in the first part of this year. This was despite CNY808.3 million in government subsidies received between January and September this year, more than double the CNY317.8 million it received last year. By comparison, the firm saw a CNY4.77 billion net loss in the first nine months of last year. Container shipping revenue soared 26.5% to CNY11.5 billion out of the total China Cosco third-quarter revenue of CNY19.1 billion. But the dry bulk division, which contributed CNY3.4 billion of the CNY4.8 billion total losses in the first half, stayed in the red. China Cosco’s third-quarter report also showed short-term borrowings nearly doubled to CNY5.64 billion by September 30, compared with the beginning of this year.
By comparison, China Shipping Container Lines posted a 204.2% rise in net profit to CNY991.1 million in the third quarter compared with a year earlier, but it remained in the red for the first nine months of this year, posting a CNY289.9 million net loss, considerably less than the CNY1.58 billion net loss reported between January and September last year. Total operating revenue climbed to CNY9.28 billion in the third quarter against CNY7.19 billion a year earlier. Total operating revenue in the first nine months rose to CNY24.59 billion, up from CNY21.17 billion in the same period last year. China Shipping Development, which specializes in oil and dry bulk cargoes such as coal, reported a net profit of CNY89.2 million for the third quarter, down 31.8% against CNY130.8 million last year, but the company also remained in the red between January and September with a CNY406.2 million net loss against an CNY815.2 million net profit last year.
DNV advises Chinese shipyards to invest in European counterparts
By : agxadmin
Det Norske Veritas (DNV) says the time is ripe for Chinese shipyards to invest in European counterparts as a way to raise their design capability and meet the challenges being posed by tougher environmental regulations. Besides a few big shipyards with a strong design capability, “Chinese yards in general lag behind the industry leaders such as South Korea and some European countries in customer service and diversification”, Remi Eriksen, CEO of DNV Maritime and Oil & Gas, said. Many European shipping operators are struggling financially at the moment, which has reduced their market values, making them vulnerable to takeover, and open to investment approaches. Recently, Aviation Industry Corp of China (AVIC), one of the largest state-owned aerospace companies, acquired Deltamarin, a Finland-based ship design company. AVIC has expanded steadily into shipbuilding in recent years, and currently controls several shipyards in China. Investment in European shipyards would assist Chinese firms to meet new environmental regulations. The European Commission announced on October 1 that it is to establish its own system next year to curb carbon emissions from the shipping industry, which might include a fuel or carbon tax, mandatory emission reductions per ship, or inclusion in its Emissions Trading System (ETS), a system it imposed on the aviation sector. There is currently no regulatory mechanism on greenhouse gases from the shipping industry, which experts suggest accounts for 3% of the world’s total carbon dioxide emissions. In addition, Chinese shipyards need to improve their energy-efficiency technologies, the China Daily reports.
Production at Chinese shipyards declines
By : agxadmin
Production at Chinese shipyards declined steeply during the first three quarters of the year. Finished capacity dropped by 18.5% from last year to 41.58 million DWT, and new orders decreased by 46.9% year-on-year to 15.41 million DWT, according to the latest data of the Ministry of Industry and Information Technology (MIIT). Chinese yards’ order book stood at 121 million DWT by the end of September, down 19.4% from the end of 2011. Sun Bo, Senior Executive of the China Shipbuilding Industry Corp, said that last year there was still a demand for more sophisticated vessels, but this year market demand was weak for all kinds of vessels. He added that a recovery is unlikely to happen within the next three years, and only big shipyards with lots of orders are likely to survive. Tan Zuojun, former General Manager of the China State Shipbuilding Corp estimated that at least half of China’s more than 3,400 shipyards will go bankrupt within the next three years. Some industry analysts were even more pessimistic about the industry’s prospects, saying that only 300 of the biggest yards in the country will still be operating when the market starts to improve.
Port operators to increase rail links to inland cities
By : agxadmin
Shenzhen ports in Shekou and Chiwan are planning to strengthen their rail freight links with China’s western cities by setting up containerized cargo services to Chengdu, Chongqing and Kunming, Erik Yim, Managing Director of Shekou Container Terminal (SCT), said. The new railway freight services could start next year and would augment services between the two western Shenzhen ports and Changsha. He and other transport experts said further development of China’s high speed rail network would be important to the growth of containerized cargo services because freight trains could use the tracks previously used for passenger services. “If railway conditions can be improved, we hope that we can have a daily service from Changsha within two years,” he said. Rail freight experts are forecasting significant growth in containerized import and export cargo moved by rail, while operators DB Schenker Rail and DHL Global Forwarding are exploiting international containerized rail. Frederic Campagnac, General Manager of rail transport consultant Clevy China, said: “Chinese container rail has a lot of room for development.” Campagnac said around four million TEU per year is moved by rail, a figure that has remained stable for about five years. He added that just 1% of containers moved from Chinese ports are transported by rail compared with 85% by road. Sunny Ho, Executive Director of the Hong Kong Shippers’ Council, said that “so far the Chinese government has not given containerized rail a priority”. But he added that development of high-speed rail will leave the old capacity free to cater to cargo services.
Campagnac said China United International Rail Containers, whose shareholders include New World Services with a 30% interest, had opened eight container rail terminals. These facilities, including terminals in Kunming, Chongqing, Dalian, Qingdao and Wuhan, handled 20% more containers in the year to June 30. Yim said container volumes have risen by about 10% a year since rail container services to Shekou and Chiwan started in 2008. About 20 shipping lines, including Cosco Container Lines, Maersk, CMA CGM, APL and Taiwan’s Yang Ming Marine use the service. DHL Global Forwarding will start dedicated weekly container rail services next month from Shanghai to Poland in conjunction with China Shipping Container Lines which is providing the containers. The service would be 90% cheaper compared with shipping cargo by air and less than 10% more expensive that ocean freight. Transit time would be 19 days from Shanghai to Warsaw compared with 30 to 32 days by sea. A second service would start next year. The imbalance in trade between China and Europe meant freight trains returning to China would be less than 30% full. Ho said the development of containerized rail gives exporters more options to transport their products to Europe rather than relying solely on ocean freight where transit times had lengthened as lines cut ship speeds to save fuel and money, the South China Morning Post reports.
Trucking business in Yangtze delta improves
By : agxadmin
After a lackluster first half of the year, business has started to improve at Hangzhou Yongliang Logistics Co, which operates 800 trucks that carry cargo nationwide. In August, demand picked up, especially in the Yangtze River Delta region. Anhui Expressway Co, for example, which operates five expressways in the region, said it saw 19% more vehicles in August than in the same period last year.
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