Wednesday, March 20, 2013

Container Shipping - New Ships and Freight Services plus a Rise in Revenue

Things Are Changing This Month in the Box Trade
Shipping News Feature

ASIA – US - EUROPE – Several changes announced this month affecting the world’s container shipping lines as the Green Alliance reveals restructuring plans for its US East Coast freight services, whilst one of its members boosts capacity, a new ship comes in for Diana and CMA CGM releases financial information.

Diana Containerships Inc. has taken delivery of the 4,024 TEU capacity Panamax vessel the MV Hanjin Malta which it agreed to purchase last month. The ship has been time chartered to the Hanjin Shipping Co. Ltd., Seoul for in excess of three years at a gross rate of US$25,550 per day less commission meaning it should generate around US$27.98 million of gross revenues for the minimum agreed period of the charter. The acquisition means there are now eleven Panamax box ships within the Greek company’s fleet.

French group CMA CGM reviewed the company’s 2012 financial results this week at board level and announced that consolidated revenue rose by 7% in 2012, to $15.9 billion from $14.9 billion in 2011, led by the 6% growth in volumes carried, to 10.6 million TEU’s from 10.0 million the previous year. CMA CGM has worked assiduously to cut costs and says it has generated $800 million savings, well ahead of the initial target.

The shipping line claims that its improving EBITDA, up 82% year-on-year to $1,324 million, for an operating margin (EBIT) of 6.3%, is the best yet announced by any of its competitors and consolidated profit reached $361 million for the year. Changes we reported in detail previously include the sale of 49% of the Terminal Link Chinese subsidiary which generated €400 million, the cash injection from Yildirim of $100 million and the $150 million injected by (Fonds Stratégique d’Investissement) following the conclusion of debt restructuring talks with its bankers.

As to the future CMA CGM anticipate little change in 2013 from last year and believes that the current lower trade levels in Europe will be supported by its improved efficiency measures and the positive trends detected in the United States, Russia and emerging markets, particularly in Asia, Africa and Latin America. Upon releasing the information Rodolphe Saadé, CMA CGM’s Executive Officer, said:

“2012 was an important year for CMA CGM, which delivered a very good performance. As we had announced, we also completed our financial restructuring and significantly strengthened our balance sheet with the sale of a new equity interest to FSI and an additional stake to Yildirim. We have therefore begun 2013 on solid foundations from which to pursue our growth.”

Elsewhere the Green Alliance – CKYH (COSCON, ‘K’ Line, Yang Ming, and Hanjin Shipping) are to restructure their current Asia-U.S. East Coast loops effective from the middle of April. This will result in five loops (AWE1, AWE2, AWE3, AWE4, AWE7) between Asia and the U.S. East Coast with AWE7 being newly launched to replace AWE6 which was suspended during the winter season. Port rotations are as follows:

AWE1: Ningbo – Shanghai – Pusan – New York – Wilmington – Savannah – Jacksonville – Pusan – Ningbo

AWE2: Qingdao – Shanghai – Ningbo – Yokohama – New York – Boston – Norfolk – Qingdao

AWE3: Ningbo – Shanghai – Pusan – Manzanillo – Colon – Savannah – New York – Wilmington – Pusan – Ningbo

AWE4 : Ho Chi Minh – Kaohsiung – Hong Kong – Yantian – Singapore – New York – Norfolk – Savannah – Singapore – Ho Chi Minh

AWE7: Xiamen – Hong Kong – Yantian – Pusan – New York – Savannah – Charleston – Pusan – Kaohsiung – Xiamen

Meanwhile one of the Green Alliance members, Kawasaki Kisen Kaisha, more commonly known as ‘K’ Line has announced that it will deploy five new generation, eco-friendly ULCVs (Ultra Large Container Vessels) as replacements in its existing fleet in order to ‘strengthen efficiency and cost competitiveness’. It is unclear when exactly the vessels were ordered but the contract to construct the new vessels has gone to the resident Japanese yards of the Imabari Shipbuilding Company which builds around ninety vessels annually from its eight facilities around the country.

The ships will be delivered between Spring and Summer 2015 and each has a nominal carrying capacity of 13,870 TEU, length overall will be around 366 metres with a beam of 51.2 metres.