Monday, June 28, 2010

Asian Container Shipping Giants Look For Profits

Forecasts Up as Freight Carriers Stick With Rates Policy
Shipping News Feature

ASIA – US – Despite meeting much opposition the members of the Transpacific Stabilization Agreement have seemingly resolved to stick by their guns when renegotiation rates for shipping containers on the Asia to US routes, a policy which we are told, is now reaping rewards. Clearly the horrific position in which many of the container lines found themselves needed to be addressed to improve what was for many of them a potentially disastrous situation.

Earlier this month we told how Korean based Hanjin Shipping improved its stock position and now Nippon Yusen Kaisha, NYK Line, Japan’s largest box carrier by some calculations, say they too are looking to up their annual profit forecast as, seemingly, they had chosen to ignore excess revenues due from incidental peak season rate increases. NYK also have shed any excess capacity and say they are now running their full fleet on the container routes once more; a useful indicator as to the state of the market will be how many vessels are mothballed again after the seasonal hike in movements.

Peering into the abyss seems to have added new backbone to all the major carriers, it has taken a large slice of economic reality to persuade the major players that tariff concessions to their main customers can be a short cut to disaster when TEU numbers drop away. Now we hear that Mitsui OSK (MOL) and Kawasaki Kisen Kaisha (K Line) are both likely to produce better than forecast returns on their next published figures as container freight tonnages continue a slow but steady rise from last years disastrous numbers.

TSA members say they moved over 1.25 million forty foot equivalent boxes (FEU) in the first quarter of 2010, up 13% year on year and unofficial statistics point to almost doubling the percentage increase last month. When the rate increases are taken into account it shows how the container lines are clawing their way back from what was a very tricky situation for all of them.