Japanese ocean carriers NYK, MOL and “K” Line all recorded year-over-year revenue growth in their container segments for the quarter ending June 30, 2017, thanks to rising freight rates.
Japan’s three major shipping conglomerates – Nippon Yusen Kabushiki Kaisha (NYK), Mitsui O.S.K. Lines, Ltd. (MOL) and Kawasaki Kisen Kaisha, Ltd. (“K” Line) – all increased profits and revenues for the first quarter of their fiscal year 2017, which ended June 30, 2017, compared to the corresponding quarter a year prior.
All three companies’ container segments posted a year-over-year boost in revenues amid rising freight rates.
From April 1, 2017, NYK, MOL and “K” Line began operating in “THE” Alliance, a vessel sharing agreement on major east-west trades, along with Hapag-Lloyd of Germany and Yang Ming of Taiwan.
Prior to that, NYK and MOL were members of the now dissolved G6 Alliance, while “K” Line was a member of the fizzled out CKYHE Alliance.
NYK
NYK recorded a profit attributable to owners of the parent of 5.4 billion yen (U.S. $48.9 million) for the quarter, compared to a loss of 12.79 billion yen for the corresponding quarter a year prior.
Meanwhile, revenues shot up 10.8 percent year-over-year to 521.72 billion yen.
Liner business revenues totaled 171.55 billion yen, up 21.3 percent year-over-year. In regards to the liner trade, NYK said it “worked to limit fleet and operating costs by continuing efforts taken in the previous fiscal year to boost cargo-loading efficiency, switch to new highly fuel-efficient vessels with capacity for 14,000-TEUs, and optimize vessel assignment and economic performance.”
MOL
MOL posted a profit attributable to owners of the parent of 5.25 billion yen, soaring 274.8 percent from FY2016’s first quarter.
Revenues totaled 403.28 billion yen, while revenues in the containership unit alone stood at 180.25 billion yen, up 12 percent and 22.4 percent year-over-year, respectively.
For the containership segment, MOL said that on the Asia-North America routes, cargo trades from Asia were at record-high volumes due to the robust U.S. economy, while on the Asia-Europe routes, volumes from Asia were steady and backhaul volumes from Europe to Asia had increased.
“K” Line
“K” Line reported profit attributable to owners of the parent of 8.52 billion yen, compared to a loss of 26.79 billion yen for FY2016’s first quarter.
Operating revenues rose 17.5 percent year-over-year to 287.38 billion yen, while operating revenues in the containership business alone surged 20.4 percent year-over-year to 147.17 billion yen.
“K” Line increased cargo handling volumes approximately 7 percent year-over-year in the containership business.
Broken down by regions for the containership business, compared to FY2016, volumes:
• For Asia-North America services increased about 6 percent;
• For Asia-Europe services increased about 9 percent;
• Intra-Asia services increased about 17 percent;
• And North-South services decreased by 5 percent, mainly due to the termination of South America East Coast services.
Looking ahead, the Ocean Network Express (ONE) – a merged containership entity of NYK, MOL and “K” Line – is expected to commence operations from April 1, 2018.
The joint venture will integrate the three companies’ container shipping businesses, including worldwide terminal operations businesses, but excluding those in Japan, according to the carriers.
Ocean carrier schedule and capacity database BlueWater Reporting’s Carrier Ranking report shows operating fleet capacity totals of 592,788 TEUs for NYK, 553,047 TEUs for MOL and 349,616 TEUs for “K” Line.
In regards to the overall economic outlook, MOL said, “Looking ahead at the second quarter and beyond, we assume that the world economy will continue a smooth recovery. While we assume the economies of developed countries such as the U.S. and Europe to continue to recover robustly, we assume economic slowdown in China to be limited to a gradual pace.
“However, recognizing such risks as the tightening of fiscal policy and interest rates rising in the United States, China’s economy slowing more than expected, and the general uncertainty surrounding the difficult negotiations ahead for the United Kingdom’s exit from the EU, we foresee a continuation of the current unpredictability of the situation,” MOL added.
“Political risks such as the delay in the realization of the U.S. administration’s policies, as well as geopolitical risks such as increased tension in the Middle East and North Korea mean an unstable situation will likely continue for some time,” “K” Line said.