Monday, May 9, 2016

POTENTIAL $10 BILLION LOSS FOR CONTAINER LINE INDUSTRY

When will there be serious discussion on all this?. Why invest money or consolidate?






Drewry: Ocean carriers could lose $6b-$10b in 2016

The London-based shipping consultant is predicting that carrier profit margins this year will be influenced by big swings in both prices and costs.

   The London-based shipping consultant Drewry predicts that carrier profit margins this year will be influenced by big swings in both prices and costs, with carriers losing between $6 billion and $10 billion this year with how things currently stand.
   In the latest issue of its Container Insight Weekly, Drewry says the first quarter results reported by carriers indicate “rate erosion was much worse than expected, but unit cost savings were bigger than predicted.”
   It notes that international carriers that publish revenue per TEU figures reported falling anywhere from 16 percent (Samudera Shipping, a regional Asian carrier) to 26 percent (Maersk).
   However, it also noted Maersk was able to run a profit on the back of 16 percent cost savings, including a 50 percent reduction in fuel expenditure.
   “The Danish carrier’s data is not the easiest to interpret as its average freight rate for the period was below that of unit costs, which naturally implies a loss. However, additional revenue from demurrage that is outside of the freight rate helped to push them into the black, while complicating matters further Maersk’s unit costs also includes income from its vessel sharing partners as a cost reduction so that unit cost reflects net slot-charter,” Drewry said.