PSA grows its business 'despite industry chaos and economic disruption'
Singapore-based port operator PSA International said it managed to grow its container terminal business last ...
More evidence emerged today that higher volumes and improved contract rates in the second quarter of the year have boosted the earnings of ocean carriers.
In a financial update today Yang Ming said that its revenue in June was up 22.9% compared to the same month last year, while cumulative turnover for the half-year was ahead by 15.6%.
It also added that it had seen a 10% year-on-year growth in its liftings in the six-month period.
The under-pressure Taiwanese carrier published the data in an endeavour to raise the confidence of shippers and service partners, and to demonstrate how its trading was improving.
Yang Ming’s optimistic outlook follows Cosco’s announcement to the Shanghai Stock Exchange last week – ahead of its proposed takeover of OOCL – advising that it was forecasting a net profit of $272m for the first six months of the year.
One source at a Asia-North Europe carrier told The Loadstar this week “all our ships from China are full”, and said that average rates per teu on recent voyages were “more than double” those of a year ago.
He put the rate improvement down to loading a much higher percentage of contract cargo than last year and the reduced need to tap volatile spot markets.
And anecdotal reports suggest that since the recent spate of M&A activity, there is simply less competition on the route. The only carrier that appears to be down on its volumes is Maersk Line, due to it being hobbled by the recent cyber attack on its servers.
One concern that could threaten the current stability on the tradelane is how long Maersk will wait before “incentivising” shippers of ‘lost’ volumes to return to its fold.
Elsewhere, on the transpacific, carriers have not been as successful in improving the margins on annual contracts running from May to May, despite volume growth.
Furthermore, spot rates between Asia and the US came under pressure around the time of, and since, the conclusion of contract negotiations, prior to seeing a strong recovery last month.
Nevertheless, since that rally rates on transpacific have slipped each week.
Indeed, this week’s Shanghai Containerized Freight Index (SCFI) recorded a further 5.1% erosion in spot rates from Asia to the US west cost to $1,265 per 40 ft.
For US east coast ports there was a drop of 2.4% on the week to $2,251 per 40 ft.
Meanwhile, rates for the European components of the SCFI also lost ground.
Spot rates for North Europe fell by 3.1% on the week to $939 per teu, while rates for Mediterranean ports declined by 4.6% to $864 per teu.
Carriers have had some success in introducing increased FAK [freight all kinds] rates on the Asia-Europe trade, along with peak season surcharges (PSS), but that has not been replicated on the transpacific, where carriers have been forced to postpone their recent GRIs [general rate increase].
Analyst Drewry said it “expects that deferral of GRIs on the transpacific” to result in further rate decline “while the Asia-Europe market is expected to remain strong”.