Friday, October 30, 2009

Losses For Container Shipping Lines Persist As Another Asian Line Joins The Gang

Neptune Orient Confirm Fourth Period of Downward Spiral
Shipping News Feature

SINGAPORE – After China Cosco Asia’s most valuable regional carrier confirmed a $100 million loss they have now been joined by Neptune Orient Lines, group owners of APL, whose $35 million profit for the corresponding period last year appears to have slumped to a loss of almost $140 million for the past quarter.

Once again it was a familiar tale as revenue fell for the third quarter by 34% to $1.56 billion and the blame fell squarely on the usual problems of reduced demand and rates which are unsustainable. In the nine months to September 2009 the line has reported a cumulative loss of $530 million. NOL Group President and Chief Executive Officer, Mr Ronald D. Widdows, said in a statement that after the recent $1 billion share rights issue he was confident that, given the company’s strong balance sheet and its access to credit facilities it is “well positioned to weather the downturn”.

NOL join the growing band of lines which are struggling to survive the recession. So far we have seen losses or forecasted losses posted by all of the major carriers including CMA CGM, Mitsui OSK, NYK and AP Moller-Maersk. If the lines are prevented from or choose not to work together to spread the problem as widely as possible and revive rates the knock on effect could be disastrous for supporting industries.

The outlook however continues to improve as stocks are replenished by shippers world wide after a period of austerity, the recovery, as widely predicted by management of all the lines involved, is likely to be gradual however.