Orient Overseas (International), Ltd., parent company of container carrier OOCL, said it had a profit of $47 million in 2013, compared to $296 million in 2012.
The company recorded revenue of $6.23 billion in 2013, compared to $6.46 billion in 2012.
The company said liner liftings increased by 1.5 percent to 5.3 million TEU, with a steady load factor maintained at 73 percent.
“Seaborne trade growth for the liner industry was subdued in 2013," said OOIL chairman C.C. Tung. "Freight levels were disappointing, especially during the first half of the year. During the second half of the year, both physical cargo movement and sentiment improved, resulting in a slightly better freight market. Although container shipping demand growth in 2013 was lower than earlier forecasts, capacity supply growth was also lower than forecasts, which helped contribute to a much needed recovery in rates — albeit mild — during the second half of the year.”
Tung said that overcapacity will occur this year, stemming from tonnage growth, but that there will be higher demand than in 2013.
"With the U.S. recovery now a
consensus," he said, "Eurozone recovery on more solid ground, and the current
Chinese and Japanese economic growth trajectory, a healthier trade
outlook should be expected despite recent uncertainty on emerging
markets. This is especially true on the major east-west trades.
Indeed, such development should mean improved outlook for the
Transpacific, Asia-Europe and intra-Asia trades, and more positive
results for the industry as a whole.
“Industry newbuilding deliveries in 2013 reached a record high," he continued, "with a total tonnage of nearly 1.4 million TEU. After scrapping of older tonnage totaling around 440,000 TEU in 2013, overall global capacity supply grew 5.7 percent in the market against a global cargo demand growth of 4.2 percent."
He noted that the "deployment of the largest newbuildings to the Asia-Europe trade triggered cascading into the transpacific trade, which in turn further displaced a considerable number of mid-sized ships to other trade lanes. This cascading effect brought considerable excess capacity to the intra-Asia and Australasia trades as well as the transpacific trade, and added volatility to the market."
OOCL saw total liftings rise by 10 percent, year over year, in the fourth quarter due to "the rebound in the transpacific and Asia-Europe trade volumes in the latter part of the year and ... a deeper market penetration into the intra-Asia and Australasia trades," he said. For 2013 as a whole, volume ticked up by 1.5 percent, year over year. Tung added, however, that rates were volatile due to overcapacity.
During 2013, OOCL took delivery of two ‘SX’ Class, 8,888-TEU vessels from HuDong Zhonghua Shipbuilding in China and eight ‘Mega’ Class, 13,208-TEU vessels from Samsung Heavy Industries Co., Ltd., in South Korea. The ‘Mega’ Class vessels are currently the largest containerships operated by the company. There are two remaining ‘Mega’ Class ships to be delivered in 2014, and four SX Class vessels will be delivered this year and in 2015. No new building orders were placed in 2013.
Tung noted that OOIL is working with the Port of Long Beach to combine and upgrade two shipping terminals. The Middle Harbor Redevelopment Project, with its final phase scheduled for completion in 2019, "will be the most competitive, efficient and environmentally friendly container facility in North America. It is expected that the project will provide tangible benefits to OOCL’s competitiveness going forward,” Tung said.
He said the company is continuing to grow its logistics business and expects it to "become a meaningful contributor to the group over the long term."