Line revenues suffer in rates war
WONG JOON SAN
A new survey says container lines' sales revenues stagnated last year because of fierce competition over rates.
Carriers whose revenues fell included Hanjin Shipping, Hapag-Lloyd, Zim Israel Navigation and American President Lines.
Revenues & Market Trends in International Container Shipping 1997 revealed that intense competition had brought freight rates down by about US$100 last year to a worldwide average of $1,390 per teu (20 ft equivalent unit).
The report said the average decline in revenue per unit was 7 per cent and 10 major carriers surveyed could increase their total revenues by only 0.5 per cent from $17.5 billion to $17.6 billion despite an increase in cargo business.
Shipping lines transporting cargo between Shanghai and Europe, for example, were running at 80 per cent capacity but still lost money.
Freight rates were increased from May 1 by about $150 to $900 per teu and $1,800 per feu (40 ft equivalent unit).
The aggregate traffic volume of 10 major liner carriers surveyed showed an increase of 8 per cent from 11.73 million teu to 12.68 million teu.
The report, which is being marketed by the shipping journal American Shipper, includes annual profitability rankings of international shipping lines, an assessment of the impact of mergers and takeovers on carriers' operating costs, and an analysis of freight rates worldwide.