MARITIME industry analyst Drewry has said in the latest edition of its Container Insight Weekly that it expects ocean carriers to "walk away with okay sums for the full year".
The London-based analyst said that falling oil prices mean that at major container liner companies "costs are falling faster than freight rates, enabling them to continue posting profits, albeit shrinking with each passing quarter", American Shipper.
In a review of first half results of the 16 public companies that are among the 20 largest container carriers, Drewry estimates "industry-wide unit costs fell 11 per cent in the first-half 2015 versus the same period last year, whereas unit revenues were down seven per cent."
Drewry said of that group of 16, only Yang Ming and Wan Hai were able to improve their sales in the first-half of 2015 because of a "nasty combination of slow demand growth and worsening freight rates".
In aggregate, the 16 companies "collected just shy of US$60 billion in container revenues in the first six months of 2015, down 5 per cent on the same period last year".
"Despite this lacklustre sales performance, the same carriers were able to more than triple their average operating margin," which jumped from an average of 1.7 per cent in the first half of calendar year 2014 to 5.6 per cent in the first half of 2015.
Drewry noted that while carriers are benefiting from introduction of larger and more fuel-efficient ships, "some of that benefit will be negated by the destabilising effect on rates that these new ships are causing."
"Carriers need to somehow find a way to make Grips (general rate increases) stick and boost revenue before costs start rising again," said the consultant. While that will be a "difficult challenge," it said it expects "carriers to walk away with okay sums for the full year."
WORLD SHIPPING
23 September 2015 - 19:49
Carriers profits okay with low oil, because costs fall faster than rates: Drewry
MARITIME industry analyst Drewry has said in the latest edition of its Container Insight Weekly that it expects ocean carriers to "walk away with okay sums for the full year".
WORLD SHIPPING
23 September 2015 - 19:49
Carriers profits okay with low oil, because costs fall faster than rates: Drewry
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