Box lines losses reach $12bn

22nd December 2009, 12:52
Box lines losses reach $12bn
Janet Porter - Monday 21 December 2009

THE world’s top container lines ran up collective losses estimated at almost $12bn in the first nine months of the year, overturning healthy profits in the same period of 2008.

That is Alphaliner’s estimate after combining the results of 16 lines that have published their third quarter results.

These show cumulative operating losses of $9bn for the January-September period, compared to an operating profit of $5.3bn in the corresponding period of last year.

Container shipping has been stripped out of group results where possible, but Alphaliner cautions that the level of disclosure varies widely from one company to another, “making it difficult to analyse the actual performance of the liner operators.”

With the remaining carriers including Mediterranean Shipping Co, CMA CGM, OOCL, Hamburg Süd, United Arab Shipping Co and PIL estimated to have incurred a further $2bn in operating losses from their container shipping operations, that brings the total estimated operating losses of the top 22 lines to $11bn, Alphaliner says in its latest weekly market report.

Earlier in the year, Drewry estimated that industry-wide losses could exceed $30bn for the full year, while the Transpacific Stabilization Agreement warned last week that losses on that route would approach $20bn in 2009.
Total shipping revenue of the 16 carriers which have published their financial results dropped by 40% from $94 bn in the first nine months of 2008 to only $56bn this year. All of the liner companies have been hit by shrinking cargo volumes as well as falling freight rates during this period, Alphaliner notes.
Most are anticipating both demand and freight rates to recover in 2010, but nevertheless expect to stay in the red.

The unprecedented level of losses suffered by container lines has led to an increasing number of calls for fresh cash injections. Over $12bn has been raised in the last 12 months alone by shipping lines as they sought to rebuild their battered balance sheets, Alphaliner estimates.