China Cosco Holdings, owner of Asia's largest container shipping company by capacity, and China Shipping Container Lines each saw first quarter losses mount as box container rates remained below the profitability threshold and operating costs soared.
Cosco, whose businesses also include dry bulk shipping and terminal operations, booked a loss of 2.7 billion yuan ($423 million) in the quarter, compared with a loss of 502 million yuan a year earlier, as sales fell 4.5 percent. Volume at the container shipping unit jumped 20 percent, but revenue increased just 2 percent, indicating the rate challenges global ocean carriers face amid tepid growth in demand and rising capacity.
Volume on the key Asia-Europe lane increased 21 percent, the average rate achieved by Cosco, which operates a fleet of 159 container ships and has another 30 on order, declined nearly 20 percent year-over-year.
China Shipping Container Lines, the country’s second-largest carrier, posted a first quarter net loss of 1.5 billion yuan ($229 million), compared with a net loss of 146.1 million yuan ($23 million) a year earlier.
The Shanghai- and Hong Kong-listed company blamed the deterioration of its bottom line on a 1.1 percent contraction in revenue tied to rising operating costs.
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