WORLD shipping giant Maersk Line remained optimistic despite a third quarter net loss of US$116 million on the back of a 16 per cent year-on-year freight rate plunge.
This brings the carrier's nine-month loss to $230 million, forcing a negative full-year result prediction.
But group CEO Soren Skou argued that ahead of the annual Asia-Europe contract negotiations season, the carrier was "in a better position than this time last year due to higher spot rates and shipper "flights to safety" following the Hanjin crash.
The container line loss compares with a profit of $264 million in the same period last year, despite a volume growth of 11 per cent to 5.4 million TEU, London's Loadstar reported.
Q3 revenues of $5.4 billion were 11 per cent lower than the same period last year, dragged down by a 16 per cent plunge in average freight rates to $905 per TEU - although freight rates improved 5.5 per cent on the previous quarter, the first quarter-on-quarter increase since Q3 2014.
Mr Skou attributed Maersk's significantly above-par volume growth to a combination of increased loading on backhaul trades and new business gained after Hanjin Shipping entered receivership on 31 August.
"Maersk Line captured more than its fair share of Hanjin business," said Mr Skou, adding that the line was "probably seen as a safe place" He added: "Hanjin had around three per cent of the global market, so this was like a whole year of global growth coming onto the market overnight."
He said he anticipated that the "Hanjin effect" would have an impact on freight rates -already in evidence on the spot market, which accounts for around 50 per cent of Maersk Line's business - and was likely to influence Asia-Europe contract discussions and those for the transpacific trade next year.
"To my knowledge, we haven't closed any Asia-Europe contracts yet," said Mr Skou, suggesting that Maersk Line had the upper hand in those rate negotiations.
Chief executive and partner at SeaIntelligence Consulting, Lars Jensen, described the 11 per cent volume growth as a "show of force by Maersk Line".
Meanwhile, APM Terminals delivered a profit of $131 million in the quarter, compared with $175 million in the same period last year, despite container throughput at its terminals increasing to 9.5 million TEU from 8.9 million TEU in the same period last year.
However, profitability at APM Terminals remains under pressure in Latin America, North Europe and Africa, due to liner network changes and continuing weak market conditions.
As a part of Maersk's strategy review, Mr Skou said, APM Terminals would in future focus on "a better result from existing business" rather than "putting new flags in the ground".
Forwarding arm Damco was hit by lower rates and currency exchange fluctuations, but nevertheless recorded a third-quarter profit of $15 million, down from $20 million last year. Outgoing group chief financial officer Trond Westlie believes "the corner has been turned" at the 3PL.
Overall, the AP Moller Maersk group delivered profits of $438 million in the quarter, compared with $778 million in the same period of 2015, and expects a full-year result "significantly below" last year's $3.1 billion, at below $1 billion.
Source : HKSG.