Container shipping lines are still making money. Overseas Container Line (OOCL), which is owned by Orient Overseas (International) Limited (OOIL) has issued its quarterly operational update for the fourth quarter of 2023 as well as data for the full year. This shows a company that is seeing strengthening demand and consequently markedly higher revenue.
The container volumes handled by OOCL over the fourth quarter increased by 6.1% year-on-year, an increase on the 3.5% rise seen through the whole year. Trans-Pacific volumes in particular were very robust with the fourth quarter seeing a 14.5% increase year-on-year, whilst trans-Atlantic demand was almost as strong, with an 11.3% rise year-on-year. These numbers indicate that the strength of the market has been growing through 2024. The exception, of course, has been the Asia-Europe route, which in the fourth quarter saw a 6.5% fall in the volumes of containers carried year-on-year. Yet this was not necessarily a bad thing.
The mix of demand increases and exceptional conditions on the Asia-Europe route drove-up revenue for OOCL. For the Asia-Europe route alone, revenue was 75.4% greater than in the fourth quarter of 2023. On the Trans-Pacific route revenue in the fourth quarter was 61.7% higher.
The result has been a 55% increase in operational revenues year-on-year over the fourth quarter, hitting US$2,513.8m, with revenue per TEU up 46.2%. For the full year, revenue is up 30.2%. The numbers released are not full audited balance-sheet and do not give information of profits, however the utilisation of assets rose over both the quarter and the year, with full year vessel utilisation 2.6% higher year-on-year. This was despite a sustained increase in fleet-size.
The message from these numbers is that overall demand in the container shipping market is highly respectable and that the balance of supply and demand favours the shipping lines. Admittedly the extraordinary situation in the Red Sea is still a factor in the market and it is notable that OOCL has seen such as sharp fall in volumes on the Asia-Europe route. However, the numbers suggest that this is not the whole story and that the sustained increase in volumes has been able to mop-up much of the additional capacity entering the market.
Source: Ti Insight
Author: Thomas Cullen
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