CSCL expects a better 2012 after steep losses this year

PUBLISHED : Friday, 26 August, 2011, 12:00am
UPDATED : Friday, 26 August, 2011, 12:00am


China Shipping Container Lines (CSCL) is forecasting a better year in 2012 after plunging into the red with a 610.67 million yuan (HK$745.4 million) net loss in the first half of this year.

CSCL posted a 1.18 billion yuan interim net profit in 2010.

First-half revenue fell 12.9 per cent to 13.96 billion yuan, down from 16 billion yuan in the same period last year. From January to June, CSCL's shipping fleet carried 3.43 million teu (20-foot equivalent units), down 3.3 per cent from 3.55 million teu last year.

Managing director Huang Xiaowen (pictured) forecast slightly better prospects in the next two years with 'very stable' growth of between seven and nine per cent a year in container volumes on international routes. As a result '2012 and 2013 would be much better than this year' for the shipping firm, he said.

Huang said peak-season surcharges on Asia-Europe and transpacific routes would provide a stable freight rate environment in the second half.

CSCL, the mainland's second-largest container line, plans to introduce a US$200 per teu peak-season surcharge on container shipments from Asia to Europe from September 1. However, the surcharges would be levied for a much shorter period due to the current dismal market conditions, Huang said.

Surcharges are usually imposed on shipments from July onwards as exporters meet pre-Christmas orders. Overcapacity in the market has, however, depressed freight rates while the economic woes in the West have hurt consumer sentiment.

CSCL said container ships with a combined capacity of 780,000 teu - equivalent to 5.2 per cent of the global container ship fleet - were delivered in the first half this year. This coupled with lower freight rates, weaker consumer demand and higher oil prices have led to a slowdown in the container shipping sector. As a result, container lines delayed imposing peak surcharges from July to August or September.