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From APL to Zim – ocean freight carriers which publish financial results have now done so for the full-year 2014, or nine months ending 31 March.

2014 proved a better-than-expected year, in terms of volumes, for carriers serving the Asia-Europe tradelane. It saw North European imports increase by 8.2%, compared with the previous year, and vessel utilisation levels average 96.6%, according to Drewry data.

But on the transpacific route, carriers suffered significant costs from vessel delays and the chartering of extra vessels when the US west coast ports were blighted by congestion and industrial strife.

Elsewhere, the cascading of ships to accommodate the ‘new normal’ 13,000+ teu ships plying Asia-Europe triggered downward pressure on freight rates. Bigger ships struggled to keep pace with tumbling freight rates, against a backdrop of slow market growth.

The carrier financials have provided a mixture of good (Maersk, CMA CGM and OOCL), bad (APL, MOL) and ugly (Hapag-Lloyd). But almost the last to report, Israeli carrier Zim, joined the ranks of “improving, but must do better”, which include CSCL, COSCO, Evergreen, Hanjin, HMM and Yang Ming.

Zim, which completed its painful $3.4bn debt restructuring in July last year, including a $1.4bn debt-to-equity swap for many of its creditors, improved its bottom line significantly, recording a net loss of $127m in 2014, in comparison with the $213m of red ink in 2013.

Moreover, in the final three months of the year, Zim would have moved into the black with a net profit of $17m but for an accounting provision of $21m for the revaluation of fuel hedging transactions.

The company carried 2,360,000 teu in 2014, a 6% decrease on the previous year, due, it said, to the termination of its liner service from Asia to North Europe.

Nevertheless, Zim operated a number of ad-hoc sailings to North Europe after it had officially withdrawn from the trade, taking advantage of the abundance of cargo on offer prior to the end-year slack season.

Total revenue in 2014 equated to $3.4bn, compared with $3.7bn the year before, but differing from most of its peers, Zim actually increased its average rate per teu by 2% to $1,243 over the year, with its average rate for Q4 at $1,271 per teu.

The “termination of non-profitable lines” is a core feature of Zim’s new business plan, as is its opportunism, which it demonstrated by organising ad-hoc sailings from Asia to the US east coast in the earlier part of the year.

In providing inducement sailings to US east coast ports, Zim benefited from the desire of Asian shippers to reach a reliable, congestion-free American gateway. These customers were reportedly prepared to pay double the normal west coast freight rate.

Much of this revenue will feature in Zim’s 2015 first-quarter result and, in combination with lower bunker costs, should provide a foundation for further improvement in the carrier’s profitability.

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