Repositioning worries ease
P&O Nedlloyd says a first-quarter rise of 14.94 per cent in the number of containers it handled between Europe and Asia has largely relieved its box-repositioning problem.
It said it handled 238,500 20 ft equivalent units (teus) on the east-bound run, compared with 207,500 teus in the year-previous quarter.
Its Asian position had improved significantly and the outlook was positive.
'Although welcome in itself in that it has largely obviated the need for repositioning empty containers, these are the non-dominant, that is, lower yielding, legs of the trades,' it said.
Growth in Asian exports to Europe had not matched the high levels of the first quarter last year.
It said the rate development on the Europe-Asia trades - which had been going up on the dominant, westbound legs and had stabilised east-bound, albeit at a low level - largely had been as expected.
There were good prospects for further improvement in both directions.
Much depended on the strength of the main Western economies because their propensity to import had made possible the recent rate increases on the dominant Asian export legs - with the prospect of more to come.
It said further consolidation was taking place because demand and supply levels continued to show marked improvement, with demand in 2000 forecast to grow 6.5 per cent and supply only 3.9 per cent - which would be the first time in five years that growth in demand exceeded growth in supply.
P&O Nedlloyd said the North America trades covering the Pacific were improving, although the recent eastbound increase would be reflected only from the second half this year.
The Atlantic trades had fallen with further deregulation and new entrants.
P&O Nedlloyd reported that its operating result improved by US$4 million to a loss of $22 million, and the loss before tax by $3 million to $36 million in the first quarter against the same quarter last year.
Although the first quarter usually was the weakest of the year, volumes had increased 14 per cent from the same period last year.
It handled 219,800 teus in the north-south and cross trades and 180,900 teus in trade between Europe and North America. The total handled in the quarter was 639,200 teus, up from 546,900 teus from a year earlier.
Average revenue per teu fell 8 per cent from the first quarter last year and 3 per cent against the December quarter. Most of the 3 per cent decline was due to a change in cargo mix, it said.