Weak Western growth to hit cargo demand
March 28, 2013 Category Logistics, Ports & sea transport
Shipping executive says despite higher container rates, 2013 will be as difficult as last year. Anaemic growth in the U.S. and little improvement in Europe’s economic conditions will make 2013 as “challenging” as last year for Orient Overseas Container Line (OOCL), Ken Cambie, Chief Financial Officer of Orient Overseas (International) (OOIL), said. First-quarter cargo demand was as difficult as 2012 although container rates were higher than this time last year. He said OOCL was looking to increase rates in the coming months as cargo contracts are renewed with freight owners on transpacific and Asia-Europe trades and general rate rises are implemented. Asked if there was concern cargo owners could resist rate rises, Cambie said OOCL was seeing a typically seasonal pattern with a weak January and this was expected to be followed by a stronger spring and summer. Cambie said Søren Skou, Chief Executive of Maersk Line, the world’s largest container shipping company, expected freight rates will be higher in 2013 than last year. Cambie confirmed that the average load factor on OOCL’s fleet of 98 ships fell to 73%, down 3 percentage point compared with 2011. But the firm was “quite happy to take 73% and be profitable rather than 90% and be losing money,” he said. OOIL’s net profit climbed 63% to USD296.4 million last year, up from USD181.6 million in 2011. Revenue climbed to USD6.46 billion, up from USD6 billion in 2011. Net profit at OOCL more than doubled to USD197.2 million last year compared with USD86 million in 2011. OOCL posted a second half operating profit of USD111 million against a USD38.3 million operating loss in the second half of 2011.
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