Japanese carriers NYK, MOL and “K” Line’s posted combined losses of more than $500 million on container operations in the last quarter of 2011 and warned that group-wide losses for their current fiscal years will be larger than previously forecast.
In separate quarterly reports, Japan’s Big Three carriers cited sluggish demand, low rates, a strengthening yen and high bunker fuel prices. The diversified carriers said they are suffering from soft bulk and tanker markets in addition to overcapacity in container shipping.
The results followed Hanjin Shipping’s report this week of $487 million in container shipping losses for 2011. The Japanese carriers offered a generally dour outlook for the rest of their fiscal years, and said they are working to cut costs to minimize losses.
NYK’s liner operations lost $179 million in the company’s October-December third fiscal quarter, reversing a $96 million profit a year earlier. Liner revenue dropped 9.6 percent to $1.3 billion.
MOL’s container losses for the October-December quarter totaled $155 million, compared with a $98 million profit a year earlier, as revenue fell 9.7 percent to $1.7 billion. “Stagnation of ocean shipping markets has become prolonged while low-growth conditions persist in developed countries’ economies,” MOL said.
“K” Line posted a $173 million operating loss on container shipping during the quarter, compared with a $69 million profit a year earlier. Container shipping revenue fell 11 percent to $1.2 billion.
The company said the container shipping outlook remains “uncertain” because of the sluggish global economy but said freight rates “have bottomed out since the beginning of the year” and that “further recovery is expected.”