News / More blank sailings and detours as ONE’s volumes, earnings, fall

ONE Freedom. Credit VesselFinder

ONE said today it would blank more sailings and detour more ships round the Cape of Good Hope, following falling cargo volumes and earnings from April to December last year.

Net profit for the September-December 2022 period alone had fallen 43% year on year, to $2.77bn. For the full year, ONE forecasts a net profit of $14.73bn, down 4% year on year.

Cumulatively, due to peak turnover in April to August 2022, ONE’s revenue for the first nine months of the fiscal year was 14% higher year on year, at $24.64bn, while net profit was up 18% year on year, at $13.79bn.

ONE, formed from merging the container businesses of Japan’s three major shipping lines, MOL, NYK and K Line, in 2017, said that cargo volumes on the east-west trades collapsed due to well-stocked retail inventories in North America, a situation which became clearer in July-August last year, and a decline in consumption in Europe due to rising inflation.

As Covid-19 restrictions and checks began to be lifted worldwide, logistical bottlenecks started clearing, resulting in more tonnage supply.

From September to December, transpacific volumes totalled 746,000 teu, down from 822,000 teu in the same period a year ago, while Asia-Europe volumes fell to 611,000 teu, from 716,000 teu in the same period.

In his new year message this month, NYK CEO Hitoshi Nagasawa said ONE was facing “a tidal wave in its business environment” and had to “take countermeasures”.

In response to the challenging market, ONE will optimise the supply of ships and containers, even as it expects to take delivery of nine 15,000 teu newbuilds commissioned on the back of a long-term charter with Seaspan Corp. The first of those, ONE Freedom, was delivered in October.

In November, Poseidon Acquisition, a consortium comprising ONE, Fairfax International and the Washington family, David Sokol, chairman of Seaspan parent Atlas Corp, agreed to a $10.9bn deal to acquire and privatise Seaspan.

ONE said more sailings had been blanked since end-2022 and more sailings would be reduced, particularly during the Chinese New Year holiday.

ONE and its partners in THE Alliance have been diverting ships round the Cape of Good Hope on return legs of Far East-Europe and Far East-North America east coast sailings to reduce the idle time of vessels caused by blank sailings.

Slow-steaming will also be enforced to reduce carbon emissions and vessel supply, while container supply will be optimised by returning leased containers and distributing empty containers to the appropriate locations.