News / Operating results for bellwether OOCL suggest good news for carriers

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OOCL has released operational results for the fourth quarter of 2018 which suggest trading conditions continued to improve for global container carriers in the final months of last year.

The fourth-quarter and full-year results of the world’s largest container line, Maersk, will be published on 21 February, but the operational numbers from OOCL are generally a good pre-financial results indication of how the industry performed in the previous quarter.

The COSCO subsidiary carried 6.4% more containers on its ships between October and December last year than in the same quarter of the previous year, at 1,715,609 teu, and ended the year with total liftings of 6,696,919 teu, 6.3% up on 2017

The Asia-Europe trade for OOCL grew 14.4% in the fourth quarter to 335,746 teu, pushing the year total to 1,302,305 teu, an annual gain of 14.5%.

On the transpacific, there was a 6.1% increase in OOCL’s Q4 liftings, to 501,275 teu, and for the full year showed growth of 8.9% and 1,973,884 teu.

On intra-Asia/Australasia, OOCL’s biggest region, there was a year-on-year gain of 4.6% in the fourth quarter, to 770,423 teu, but a more modest 2.6% increase for the full-year, to 2,918,202 teu.

The only negative performance in terms of liftings was on the carrier’s smallest tradelane, the transatlantic, where there was a 1.6% drop in carryings to 108,165 teu and a marginal 0.9% decline in volumes for the full-year to 426,458 teu.

OOCL’s Q4 revenue jumped 13.5% on the same period of last year, to $1.56m, and for the full year revenue increased by a healthy 9.9% over 2017 to $5.96m.

The carrier’s star revenue performance was on the transpacific route, which saw fourth-quarter revenues leap 26% to $670,004 to end the year 17.9% higher on $2,437,146, boosted by a spike in spot rates, a consequence of the frontloading of goods to beat US tariff hikes on Chinese imports.

There was also evidence of freight rate gains across other sectors, which suggests the carrier enjoyed a profitable quarter, regarded as a positive sign for the results of its peers.

Bunker prices started to fall at the end of October and had slumped by around 30% by the end of the year. However, given the six-week timing lag on purchases, much of this benefit will only fall to operators in the first quarter this year.

OOCL’s container activities recorded a loss of $73m in the first half of last year. However, this was a more respectable result than many of its peers, the industry suffering from a combination of soft rates and high bunker prices to clock up a massive $2.2bn in negative earnings overall.

However, many carriers had substantially improved their results by the third quarter and, depending on the strength of their fourth-quarter results, could have ended the year back in the black.

Rumours have also been circulating recently that OOCL is about to place an order at a Chinese yard for six 23,000 teu LNG-ready ULCVs – although so far the carrier has denied the story.

Meanwhile, parent COSCO is set to receive 12 19,200-21,200 teu ULCVs in the first half this year, prompting the Ocean Alliance to announce the launch of a seventh Asia-North Europe loop from April.