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Reduced costs boost STC profits

As Covid-19 continues to disrupt markets around the world, ocean carriers are reducing capacity and sailing speeds. With sailing options reduced, especially on Asia-Europe routes, lead times are likely to increase as shippers look for ways to optimise supply chains.

Stolt Tank Containers (STC) noted that May saw blanked capacity equal to the levels experienced back in February right after Chinese New Year. In May, more than 500,000TEU of weekly global head haul capacity (21% of the total) was blanked.

Even so STC reported second-quarter revenues of US$135.2 million, up from US$129.4 million, and an operating profit of US$13 million, up from US$6.7 million in the first quarter, reflecting higher demurrage revenues and lower repositioning costs, it says.

The number of shipments increased by 77 from Q1 to Q2, though average utilisation increased by 1.7% compared with the first quarter. The increase in shipments for the same period last year stood at just over 3,700.

“Less repositioning was conducted to balance the fleet and meet demand,” STC told Container News. “Shipments slowed in almost all areas due to Covid-19, but the largest slowdown occurred in Europe.”

Commenting on the company’s results and outlook, Niels G. Stolt-Nielsen, CEO at Stolt-Nielsen Limited, said, “After a record number of shipments in March and continued strength in April, shipments slowed in May. Operating income for the quarter overall was on target, which also reflected the positive impact of actions taken to reduce operating expenses.

“The outlook is difficult to predict and highly uncertain. We are seeing signs of a slowdown in certain regions at Stolt Tank Containers, which we suspect may be a result of consumption declining, but also the beginning of a seasonal summer slowdown typically observed at STC.”

Katerina Kerr
Tank Container Correspondent

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