Container shipping provided most of the profits that put Japanese carrier “K” Line back in the black during its October-December quarter, reversing losses of a year earlier.
“K” Line reported group-wide net income of $85 million for its fiscal third quarter, compared with a net loss of $205 million a year earlier.
Container shipping provided $70.1 million of the group’s $119.6 million in operating revenue for the quarter, despite an 8 percent overall reduction in cargo volume between Asia and North America as the carrier reduced capacity.
By The Numbers: Container Rate Benchmark
“In the container ship business, cargo movement, particularly outbound cargo from Asia, remained firm,” CEP Kenichi Kuroya said in a letter to shareholders. “The freight rate market showed slight softening trends, in part because of seasonal factors, but remained generally in line with expectations.”
He said that in the current quarter, “K” Line expects cargo movement to suffer from factory closings around the Lunar New Year in China, and because of economic uncertainty, including financial instability in Europe and weak real estate and employment markets in the U.S.
The company said it would respond by continued slow steaming and by keeping a tight rein on capacity.
“K” Line forecast the dry bulk market will “undergo a gradual recovery” beginning in mid-February and that the company’s car-carrying business expects continued “modest recovery.”
“The market for medium and small-size vessels will likely undergo a moderate recovery as a result of longer transport distances of coal imported by Asian buyers due to being switched from Australian suppliers to U.S. and other sources, as well as brisk cargo movement of coal and soybeans to China and coal to India,” Kuroya told shareholders.
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