Despite falling freight rates carriers can still make money - Drewry

Carriers can still make money despite falling freight rates, according to Drewry’s latest Container Annual Review and Forecast 2014/2015, noting that surprisingly, some medium-sized lines retain unit cost advantages.

In the maritime analyst’s Container Insight report this week, Drewry points to second-quarter income statements to show that more ocean carriers are emerging from the red. “From the 15 of the ‘top 25’ carriers that publish quarterly financial results, the number of profitable lines doubled from five in the first quarter to 10 in the second quarter. However, the distribution of profits was still extremely uneven and insufficient for most to eradicate their first quarter losses,” said Drewry.

What separates the carriers is the speed of those reductions to rates and costs and when the journey started. For example, Maersk and CMA CGM were the first to lower slot costs through their larger fleets of Ultra Large Container Vessels (ULCVs) so that by moving a lot more boxes at a profit they are gapping their rivals in the profit stakes, noted Drewry.