[080520.EN.SEA] ONE's CEO Praises Maritime Industry For 'Keeping The Lights On' During Hard Times

ASIAN inventory levels have declined, including "very low" levels of stored food products which is fuelling the increase in European and US exports to Asia according to Ocean Network Express (ONE) CEO, Jeremy Nixon.

Demand in Japan, China, India and Taiwan has increased and with the void sailings out of Asia there is a substantial decrease in capacity on the return leg also, and this has pushed up rates as a consequence, Mr Nixon said in an interview with Container News.

Backhaul volumes westbound from the US have risen substantially since March when the return leg rates sank to US$343/FEU, according to the Freightos Baltic Index (FBX). On May 4 the same rates stood at US$484/FEU, a more than 40 per cent increase on late March rates.

On the North Europe to Asia trades the increase since March 1 has been even more pronounced with rates standing at US$1,424/FEU, from US$690/FEU. While from the Mediterranean rates surged from US$455/FEU to US$925/FEU in the same period, according to the FBX.

Mr Nixon said that "both dry and reefer cargo had seen rate increases due to the enforced blanking of sailings".

He went on to say that operational cost savings due to the reduced services would also result in decreased revenues for the major container lines, on their headhaul trades, as a result of the Covid-19 crisis.

Mr Nixon estimated that the container volumes over the coming month would be around 20 per cent lower as the Golden Week holidays during the first week of May, "but it's too early to say what will happen in June".

The CEO stressed the importance of being nimble "to react to the needs of the customer", adding that it was critical for the operator to also "adjust capacity in line with demand" and that will "prevent additional opex".

According to Mr Nixon the broader maritime industry is "doing a good job of keeping the lights on, keeping trade going", in what are extremely difficult circumstances. He paid tribute to the port workers, truckers and crew and said the company is working hard to make sure these workers are given the key worker status that they deserve.

ONE believes the maritime industry is "doing a good job of keeping the lights on".

"We are working with the G20 states, the United Nations, the International Chamber of Shipping (ICS) and others because it is critical that vessels are allowed to operate efficiently, there is a need to repatriate crew who've been working on these ships for a long time," explained Mr Nixon.

Source : HKSG / Photo : Lloyd;s List.