OOCL's performance in the first quarter and upcoming market trends

Business results of the container shipping company OOCL in the first quarter of 2020 and the trend of international container shipping market in the near future.

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The FBX index shows global freight rates remain stable, freight rates from Asia to the US West Coast are only 1% lower than last week, while shipping rates from Asia to Europe recorded a small increase of 1%.

For OOCL, the carrier has released first quarter data, "In the first quarter of 2020 (ending March 31, 2020), total volume decreased by 0.4% compared to the same period last year. Revenue increased by 5.5% to 1,540.3 million USD, load capacity decreased by 1.7%, Overall load factor increased by 1.1% compared to the same period in 2019. Average revenue per TEU increased by 6, 0% compared to the first quarter of the previous year ".

OOCL's volume in intra-Asia and Oceania trades has decreased by 4.5%, but revenue has increased by 10.8%. This shows that shipping lines have successfully maintained their earnings in the early stages of the pandemic.

However, OOCL's largest volume is its transportation to Europe and the United States, including transatlantic routes. All of these routes have shown a clear increase in production and revenue in the first three months of the year compared to the first quarter of 2019. Except for trans-Pacific shipping revenue, it has remained unchanged compared to the previous year.

The Sunday Spotlight has reported the blanked sailings during the pandemic and this week, figures show that the number has increased to 460 blanked sailings. But perhaps the most important comment this week from Sea-Intelligence, is that demand for economies has just entered a prolonged period of narrowing.

"Last week, the Asia-North Europe transport line saw 38% of its capacity cut, and in the coming weeks, other long-haul routes will be the most affected, such as the transport route from the Mediterranean to the East Coast of North America the load capacity was cut by 33% in week 19 and the transport route from Asia to the East Coast of South America saw huge capacity cuts, up to 59% in week 20 ", according to the Sunday Spotlight.

The blanked sailings on Pacific will reduce the US West Coast's capacity by 29% and the US East Coast's 31%.

From the demands of the main routes in the Pacific and Asia-Europe, it is possible to forecast a decline in revenue due to a drop in volume, the same thing happens on the Atlantic shipping routes.

Sea-Intelligence figures show that blanked sailings are at the peak of this pandemic, but the impact on the supply chain will be extended to the second quarter with exports to compete with empty containers.

According to FBX, a situation that occurred in the transit from the Mediterranean region to Asia, the service with freight rates dropped to a very low level in late February, with the freight rate reduced to 455 USD/FEU and rebounded to 940 USD/FEU on April 24.

As reported by the Sunday Spotlight, "In the next 6-8 weeks, we will see very clearly a period where the total volume of demand for exported goods and the number of empty containers exceeds the total available shipping capacity. In the past, with this situation, carriers prioritized the rotation of empty containers, limited the number of bookings, and as a result, freight rates would increase."

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