Spot rates still tumbling, but carriers 'can still make good money', says NVOCC
Container spot rates from China to Europe and the US tanked again this week, leading ...
Orient Overseas (International) Ltd (OOIL), parent of ocean carrier OOCL, has announced a profit from operations last year of $903m, compared with $195m in 2019, after Q4 profits reached $801m.
The Cosco Shipping-subsidiary’s revenue rose 19%, to $8.2bn, heavily weighted towards the second half of the year when consumer demand bounced back strongly and freight rates climbed.
OOIL has decided not to separate its logistics business financials from its liner sector, but said despite Covid-related challenges, OOCL Logistics “had a fruitful 2020”.
OOCL saw 2020 liftings improve by a much-above industry par of 7.3%, to 7,461,941 teu, with the highlight an additional 10.2%, 1,966,819 teu, carried on the transpacific tradelane.
The carrier’s volume growth was particularly impressive in a year that saw liner rival Maersk and Ocean Alliance partner CMA CGM’s liftings contract by 5% and 2.7%, respectively, due to the impact of the pandemic in the first half of the year.
OOIL said: “Our impressive result for 2020, which includes the highest-ever revenue, liftings and profit figures for our core container shipping and logistics business, was achieved in an unprecedented and extremely complicated context.”
It had reacted promptly to “a wave of unexpectedly strong demand” especially on the transpacific, it said.
“Our teams had to manage not only sudden and severe swings in demand, but also tremendous operational challenges,” it added.
OOIL said it had “continued to benefit from increased cooperation and synergy” with its parent, Cosco Shipping.
“In this dual brand context and despite the impact of the pandemic, we expanded our presence into new routes, serving many emerging markets, not least Latin America, and building up our global coverage further,” said OOIL.
It added that OOCL’s membership of the Ocean Alliance “continues to provide us with a significant advantage”.
“We have been members of the alliance for four years, and look forward to attaining further benefit from our continued membership into a fifth year,” said OOIL. “Looking ahead, despite current strong markets, we recognise that the full impact of Covid-19 may not be known for some time.
“By this, we mean not only the inevitable fluctuations of the freight rate markets and of the balance between shipping supply and global demand, but also that it remains to be seen how supply chains will evolve after the challenges of 2020,” it added.
Cosco Shipping has a combined capacity of 3m teu and is ranked third in the carrier league table, just ahead of CMA CGM, although the French carrier has a larger orderbook.
OOCL has 12 23,000 teu ULCVs which are on order scheduled to be delivered during 2023 and 2024.