Liner profitability evades Japan's Big 3 in 2013
Japan’s three liner carriers on Tuesday reported combined operating losses of $184.4 million in their fiscal year 2013 ending March 31, as the performance of each line suffered compared to the previous fiscal year.
MOL’s liner division accounted for most of the losses between the three lines, suffering a $145.3-million loss (29.5-percent higher than in the previous fiscal year). MOL’s liner revenue grew 18 percent in dollar terms, to $7.2 billion. At the group level, MOL had $17.3 billion in revenue, down 5.8 percent, year-over-year, in dollar terms, and an operating profit of $399.3 million, compared to a $191.5-million loss in previous year.
MOL said the transpacific and Asia-Europe container trades were both stable and that “intra-Asia routes were firm partly due to economic recoveries in the developed countries of Europe and the U.S. despite factors for uncertainty such as the impact of developments in China’s economy and political unrest in Thailand. The North-South routes were also firm despite concerns about the negative effects of weaker growth and currency value declines.”
But MOL noted that freight rates declined, affected by an increase in capacity due to deliveries of large containerships. Rate decline was most evident in the Asia-Europe and North-South trades.
NYK Line’s liner division had a $38.1-million operating loss, 25.3-percent worse than in its previous fiscal year, on revenue that was $6.2 billion (down 4.6 percent in dollar terms).
At the group level, NYK had $22.4 billion in revenue (down 2.6 percent in dollar terms) and $451.1 million in operating profits (up 113 percent year-over-year).
The company said that its container-shipping division lifted greater volumes, but that freight rates declined during the year due to the continued deliveries of ultra large containerships, mainly on European routes, which caused large vessels to cascade to other routes and worsen the supply-demand imbalance.
The G6 Alliance, of which MOL is also a part, was expanded to North American East Coast routes “enabling further consolidation and the enhancement of the services network," NYK noted.
“In Asia, which NYK Lines has positioned as a key growth region, lifting volumes surged compared with the previous year after services were realigned to improve competitiveness and the business structure was bolstered to better respond to customer needs,” the line continued. “NYK Lines achieved a large reduction in costs while raising competitiveness by returning uneconomical vessels, introducing highly fuel-efficient, ultra-large containerships, and implementing measures to reduce ship operation and navigation costs. In the terminal division, the depreciation of the yen boosted the overseas terminal business.”
“K” Line, meanwhile, had a $1-million liner operating loss, compared to an $80.2 million profit the year prior. Liner revenue was $5.8 billion, down 13.4 percent, year-over-year, in dollar terms.
At the group level, “K” Line had $11.9 billion in revenue (down 16 percent in dollar terms) and a $280.4-million operating profit, up 55.1 percent, year-over-year.
“K” Line said freight rates in the containership sector went on at low levels, especially in Europe service routes, due to stagnant European economies.
It said in the car carrier business, the growth of cargo from Japan “lost momentum,” while the dry bulk shipping industry recovered after last summer due to China-bound iron ore.
The carriers’ performances in dollar terms were affected by a significant decrease (21.2 percent) in the average value of the yen from the 2012 to 2013 fiscal years.