China Shipping Container Lines has reported a loss 2.6 billion Chinese Yuan Renmenbi ($420 million) for 2013, compared with a profit of 574 million RMB for the prior year.
The company said while it “was not able to turnaround the loss-making situation, the company kept its faith and continued to strengthen its operations management, enhance its service ability with the view to better equip the company in the long run, using its best endeavors to make the company better and stronger.”
The company said its revenue amounted to 33.9 billion RMB compared with just under 33 billion RMB the prior year.
Sluggish demand and increased capacity “led to a notable mismatch between supply and demand,” and freight rates on main trade lanes “showed no substantial recovery and continued to fluctuate at low level,” CSCL noted.
It said the China Containerized Freight Composite Index average was 1,081.8, down 7.6 percent as compared with 2012 and that shipping companies continued to face a severe operating environment.
CSCL's loaded container volume was 8,191,204 TEUs, representing an increase of 2 percent over 2012.
In 2013, the company said it emphasized cost control and “continued to adhere to low fuel consumption, large-scale vessel development and fleet modernization for its business growth.”
It said that due to "the falling new vessel prices and the down cycle of the shipbuilding industry” that it ordered five new 19,000-TEU ships at “reasonable prices” and took in four new 4,700-TEU vessels as well as stepping up efforts to surrender old and small vessels.
CSCL said it enhanced its core competitiveness by “optimizing fleet structure,” with total shipping capacity of the company’s fleet growing 2.6 percent last year to reach 611,000 TEUs. (Alphaliner, however, pegs the size of the company’s owned and leased fleet today at 592,668 TEUs)
Looking to 2014, Alphaliner said recovery of the global economy is expected to propel a steady increase in container transportation volume, but cautioned “the imbalance in the overall supply and demand in the shipping market cannot be practically improved in the short run."
“In view of the prolonged operational pressure and the development trend for large-scale container vessels, cooperation between container liners into alliances will be further explored,” CSCL said. While CSCL is not a member of one of the three major global alliances -- P3, G6 and CKYH -- it is involved in space-sharing alliances with many different carriers -- both carriers belonging to those groups, such as CMA CGM, as well as carriers such as Evergreen and United Arab Shipping Co..