Ocean Network Express (ONE) said on 1 August that the market remains uncertain after its net profit for the three months ended 30 June plunged 91% from the year-ago period to US$513 million.
As such, ONE has refrained from making predictions about its financial performance for the current financial year, which ends on 31 March 2024.
ONE said, “The containership market is in the midst of major changes, such as, the aftermath of global supply chain disruption, changes in consumer behaviour and shifts in trade patterns due to increasing international tensions. ONE is making progress in adapting to these major changes, but further shifts in the market are expected as transport demand and trade patterns continue to alter, creating an uncertain outlook which is difficult to predict.”
Vessel utilisation had declined noticeably on ONE’s Transpacific lanes, coming in at 82% in the three months ended 30 June, compared to 100% in the year-ago quarter.
ONE’s vessel utilisation for Asia-Europe (west-bound) was relatively constant at 94%, but declined to 54% in the opposite direction, from 58% in the year-ago period.
ONE acknowledged that the market had changed since the Covid-19-fuelled boom between mid-2020 and mid-2022.
The pan-Japanese liner operator commented, “Cargo movements from Asia to North America in April-June fell by 18% year-on-year due to a lack of progress in clearing inventories resulting from stagnant consumption caused by inflation and high interest rates. Cargo movements from Asia to Europe in April-May was 9.1% higher than in the same period last year due to an increase in shipments to the Mediterranean Sea, particularly construction materials to Turkey. Shipments to Northern Europe remained at the same level as the same period last year due to stagnant consumption caused by high interest rates.
“As port congestion subsided, vessel utilisation recovered, and substantial supply normalised, but cargo demand has not recovered, which is a factor in the softening of supply and demand. The US West Coast labour negotiations reached a tentative agreement in mid-June. Meanwhile, in Canada, the labour-management negotiations had some impact on vessel operations and inland transport.”
ONE has reacted to the situation by blanking sailings and widening port coverage to enhance revenue. Ships are also slow steaming to reduce fuel consumption.
Larger ships are also deployed to East-West trades ahead of schedule, while ONE has tried to attract more volumes of special cargoes.
Martina Li
Asia Correspondent
