Strong Summer Season Seems Unlikely for Ocean Carriers

Summer is traditionally a more promising time of year for ocean carriers, but according to new reports from Alphaliner, profits are expected to fall. The pessimistic outlook follows several negative financial reports from carriers.

The financial performance of ocean carriers will deteriorate in the second quarter as falling freight rates and rising operating costs hit shipping companies’ bottom lines, as recently reported in the Journal of Commerce. Freight rates will most likely not show any significant improvement before July.

APL, Hanjin Shipping and Hapag-Lloyd all reported losses in the first quarter, and Maersk Line parent A.P. Moller-Maersk warned in reporting stronger first-quarter earnings that it expects a slimmer profit later in the year.

Average operating margins of the five main carriers shrunk from 13 percent in the final three months of 2010 to -1 percent in the first quarter of 2011. This masks a wide variation in the operating margins among carriers—ranging from 7 percent for Maersk Line to -13 percent for CSAV in the first quarter. This erratic behavior could prolong the current downturn as action to curb oversupply is delayed.

As more trends in the transportation industry divert from predictability, more key players are using PIERS solutions to stay ahead of the game. Seaboard Marine, for example, uses PIERS data to effectively manage competitive planning.

“It has strengthened our ability to keep up-to-date on the import/export activities of other companies which empowers us to react not only with informed strategy, but also with swift ingenuity,” said one representative of the company. “The data portrays the market shares of other ocean carriers with clarity and precision, proving instrumental to our successful achievement of wide-ranging market research initiatives.”

To learn more about how PIERS can help your business, visit www.piers.com/transportation or register for a free demo. A PIERS’ Data Solution Expert will be happy to provide you with a demo specific to your market. You can also network with other PIERS users through our newly-launched Facebook page and LinkedIn Group.

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