It features the loss at COSCO (The largest Chinese shipping company).
Here are some of the highlights.
China Cosco’s container-shipping business, the nation’s biggest, had a 4.32 billion yuan ($632 million) operating loss as U.S. and European consumers pared spending on Asian-made goods, hammering rates. Its commodity-ship operations, the world’s largest, posted a loss after sales tumbled 72 percent on overcapacity in the global fleet.
Container lines “will still be under pressure in the second half as rates won’t cover costs,” said Johnson Leung, a Hong Kong-based analyst at Tufton Oceanic Ltd., the world’s largest shipping hedge-fund group. “The rate increase for the peak season may only be sustainable for a couple of months.”
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All 10 of the world’s largest listed container-shipping companies have posted losses this year, triggering industrywide efforts to raise rates through coordinated increases and capacity cuts.
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Attempts to increase rates have stumbled amid excess capacity caused by plunging demand and the launch of new vessels ordered during a trade boom that ended last year. Maersk, the world’s largest container line, is ready to slash rates if rivals attempt to win market share by undercutting prices, Danish newspaper Dagbladet Borsen said earlier this week, citing Chief Executive Officer Nils Smedegaard Andersen.
UBS expects container rates to get stuck at just above a zero profit margin as anything more than this will persuade shipping lines to return idled vessels into service.
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