Ocean Carriers Face Prolonged Slump, Alphaliner Says

Alphaliner expects most container shipping lines to lose more money in the fourth quarter than they did in the third quarter, as the industry suffers from weak demand and lower rates.

“The rising losses have created additional pressure to seek fresh cash injections among the carriers as the industry braces for a prolonged downturn that could last for several more quarters,” the container analyst said.

The average operating margins of the top 15 carriers surveyed by Alphaliner fell 9 percent in third quarter, compared to an 8 percent decline in the second quarter. Hapag-Lloyd was the only carrier to not post a loss, whereas the other 14 carries posted losses in margins ranging from 3 percent to 25 percent.

MISC Berhad, which recently announced it was getting out of container shipping, had the steepest loss, with opeating margins down 25 percent year-over-year. Of the 15 carriers, CSAV had the second worst  margin, with operating profit down 24 percent, Alphaliner said.

Alphaliner recently forecast carrier losses of $300 million this year in the trans-Pacific alone. Some believe losses on the trans-Pacific could be double that figure. Conditions for the carriers are even tougher on Asia-Europe lanes, where the deployment of large vessels is keeping rates at low levels.

-- Contact Mark Szakonyi at mszakonyi@joc.com. Follow him on Twitter @Szakonyi_JOC