OOCL gains market share in Q1, with 'very strong' financials unveiled by Cosco
Volumes carried by Cosco-owned container line OOCL in the first quarter soared, compared with the ...
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By Mike Wackett
Hit hard by $161m of extraordinary costs – mostly the consequence of the enforced cancellation of four 12,600teu ships ordered from South Korean shipyard Samsung – Israeli ocean carrier Zim’s net loss worsened in 2013 to $530m, from the $428m in lost in 2012.
Nevertheless, the embattled carrier, which is still trying to agree a financial restructuring process that began more than a year ago, said its results were on a “par with the industry average”, and blamed a liner malaise ...
Comment on this article
Lou Roll
March 27, 2014 at 2:36 pmThe comparison of the revenue per TEU between Zim and Hapag-Lloyd, and others, should be made with caution. Such average revenue is based on various factors, such as the trade lanes in which each company operates. Zim, for instance, has a number of short feeder services both within Asia, the Mediterranean and the Caribbean, which typically have lower freight rates than long haul trades.
Mike Wackett
March 27, 2014 at 2:46 pmYou are quite right to make the point.
In fact Hapag’s average per teu rate ranged from a high of $1,747 for transpacific to a low of $1,236 for Australasia
Unfortunately there is no breakdown for Zim’s trades.
Richard Ward
March 27, 2014 at 3:13 pmIt still amazes me that carriers were able to acquire (and still are to some degree) the financing required to expand their fleets without any security over the ability to meet repayments and cover the cost of capital. I am not sure of any other industry where such large investments are made without the ability to do this – its simply too risky. This has been demonstrated very well by the container industry. No wonder carriers face such financial distress.
Lou Roll
March 27, 2014 at 4:42 pm“…not sure of any other industry where such large investments are made without the ability to do this…”: well, there are many other industries to which financing is offered with weak guarantees of future revenues and loan repayment, and, of course, we have the internet software industry which gets large financing only on the promise of future revenues if and when the products can be “monetized”. Back to shipping, it has one advantage that it shares with aviation: ships, as planes, are mobile and “fungible” in the overall global fleet, they can be easily transferred around the globe, re-chartered and re-sold, which is much more difficult if you have financed, say, a chemical or an electronic equipment plant in some country, which falls into bankruptcy later-on.
Richard Ward
April 03, 2014 at 1:14 pmGood points. I should have been clearer I was referring to industries that have significant investments into fixed assets such as the chemical plants you refer to, rather than sectors such as the software industry. I agree there is an element of flexibility in container shipping, although this is limited somewhat when you consider the +10,000 TEU segment and the current oversupply.
One of the other differences I can see in the container market is that non-performance of contracts is rarely enforced. Are there other industries whereby contracts that are not fulfilled (in either volume or price) are not pursued?