OOCL expects firm Pacific rates after May
Hong Kong-based Orient Overseas (International) Ltd., parent company of OOCL, said it expects firm freight rates in the transpacific and other trades this year.
“General freight levels at the time of writing remain firm on all our trade routes,” said C.C. Tung, chairman and chief executive of OOIL in the company’s annual report, just published.
“Whilst for the transpacific, the all-important negotiations of the annual service contracts remain in progress, we do not expect the outcome to demonstrate any softening in rates,” he added. Most transpacific service contracts are renewed effective May 1.
OOIL does not see rates falling in its other trades, either, and said they may increase on the intra-Asia routes due to lack of available ship capacity.
OOIL reported last month a 536-percent increased in net profit for 2003 to $329 million, saying last year was one of the best years for the container shipping industry.
The company has now disclosed that its average transpacific freight rate rose 22 percent in 2003, bringing its transpacific container operations back into profit, after a recovery started in May 2003. In 2002, by contrast, OOCL suffered “a small loss” due to “unviably low rates” negotiated with shippers in early 2002, the company said.
Tung cautioned that freight rates in the transpacific last year remained below the levels achieved in 1999 and 2000.
On the transatlantic, OOCL saw average revenue per TEU increase 13.5 percent in 2003, but with little growth in volumes.
Including shipments in all its trade routes, OOCL saw its average revenue per TEU increase 15 percent in 2003 to $1,025, as total carryings rose 19 percent to 2.7 million TEUs.