One Manato

ONE reports first quarterly profit

Japanese carrier Ocean Network Express (ONE) has posted its first quarterly profit since the merger of the container businesses of K Line, MOL and NYK on 1 April last year.

ONE recorded a net profit of $5m in the first quarter of its fiscal year, which ends 31 March 2020, and has upgraded its outlook to a full-year profit of $90m.

The carrier said it had achieved profitability “at a higher pace than estimated”, after taking action to reverse the $586m loss incurred in its first year.

NYK, a 38% equity holder in ONE, said that, “as a whole, the business performance greatly improved”, while 31% shareholder MOL said profitability had been achieved as a result of “the optimisation of cargo portfolio and cost reduction”.

K Line, which also owns 31%, said “freight rate increases” in long-term contracts for the US had contributed to the positive result.

ONE revenue soared 39% in Q1, compared with the same period of 2018, to reach $2.1bn, mainly attributed to a substantial improvement in liftings and vessel allocation load factors.

Utilisation levels on the two major headhaul tradelanes, Asia-US and Asia-Europe, which had both plunged to only 73% in Q1 18, recovered to reach peaks of 95% and 92% respectively in the third quarter. The botched launch of ONE resulted in a significant loss of business in the first two quarters with an estimated $400m negative impact on the bottom line.

Notwithstanding the stabilised liftings reported today, ONE also cited improvements in its cost reduction programme, product rationalisation and reduced spending on port agency and IT costs as all contributing to the turnaround.

It also said freight rates had “improved” in the US, South America and Asia, but had “deteriorated” in Europe. Specifically, ONE said Asia-US headhaul long-term contracts had improved after an earlier assumption that they would be “concluded at the same level”.

However, the Asia-Europe westbound freight market “hovered at the same low level as last year, because supply grew faster than demand”, it said, but added that demand on the route had still been “relatively strong”.

ONE is forecasting a $123m profit in Q2, but a $38m loss in Q3, to give a revised 12-month result of a $90m net profit, up from its previous $85m prediction.

The average price paid for bunker fuel in Q1 was $432 per tonne and ONE expects to pay the same amount for fuel in its second quarter, while its equation for the next six months includes a bunker price of $533 per tonne, which is around $150 higher than the current market price.

ONE is no doubt allowing for the extra cost of the low-sulphur fuel it will need to replenish the tanks of its ships before the IMO’s 0.5% sulphur cap comes into force on 1 January.

Nevertheless, the carrier said, it had “fully explained the issue to our customers” and had already reached agreement with its long-term contracts for recovery via its new bunker surcharge mechanism.

According to Alphaliner data, ONE is the sixth-largest global container carrier, with a total capacity of 1,565,000 teu on a fleet of 215 vessels, 74 of which are owned and 141 chartered-in. It has no new ships on order.

Source: The Loadstar

maersk halifax

Maersk Honam rebuilt and renamed after fire

Seventeen months after a devastating fire which resulted in the loss of 5 lives, Maersk is set to send the 15,282 teu boxship Maersk Honam back on active duty.

The owner decided to reuse the stern section in a new ship, to be constructed at a South Korean shipyard. The damaged bow section and the accommodations block were removed at Dubai Drydocks for scrapping. The stern section was taken from Jebel Ali to Geoje aboard a semi-submersible ship.

She retains the same IMO number, but she now carries a new name – Maersk Halifax

Source: Splash 247 / Maritime Executive

Southampton freight terminal expansion

Independent Container Line moves UK call from Liverpool to Southampton

Niche transatlantic carrier Independent Container Line (ICL) is to move its UK call from Liverpool to Southampton to improve schedule reliability.

The US-headquartered, privately-owned shipping line has been serving Liverpool for the past 20 years, calling at the Mersey port along with Antwerp in a two-port North European hub strategy.

However, ICL claims deteriorating weather conditions in the North Atlantic have delayed its fleet of 2,500-3,000 teu ships and compelled the carrier to switch its UK call to a southern port.

“Each winter is bringing more weather challenges in the North Atlantic and keeping schedule becomes more difficult. This change will allow us to get back to 100% reliability year-round, which is a core pillar of our service offering,” it said.

The weekly call at Southampton will shift to a Thursday pm arrival for a Friday am departure, with the first ICL vessel at the DP World Southampton facility the eastbound call of the geared 2,546 teu Independent Spirit on 25 July.

In the US, ICL calls at the privately-owned Penn Terminal in Chester, Pennsylvania, and at Wilmington, North Carolina.

“We have planned and coordinated various intermodal options that will allow your cargo to be picked up and delivered,” said ICL in a customer advisory, adding that its representatives would “be in touch” to ensure a “seamless transition” to Southampton.

The advisory, signed by managing partners and founders John Kirkland and Dale Ross, said the line’s UK headquarters would remain in Liverpool.

The loss of one of its oldest customers is a blow to the port of Liverpool, which in April celebrated winning a new WEC Lines service to Portugal, making the Dutch carrier its fourth liner capture this year.

They included Cosco’s slot share on subsidiary OOCL’s transatlantic service in April and the big one – the 2M’s TA4 transatlantic loop, for which Maersk and MSC agreed a permanent switch from Felixstowe in early January.

ICL’s USP has been the service speed of its ships, which are capable of 22 knots, but if the carrier is still unable to keep to advertised schedules then it probably all comes down to price. With a high unit cost, compared with its rivals, it would have struggled to be competitive at Liverpool.

According to Alphaliner data, ICL, with a capacity of 11,291 teu on its four chartered-in ships, is the world’s 70th-largest carrier.

Source: The Loadstar

One Manato

Hapag-Lloyd and ONE join Maersk/IBM blockchain platform TradeLens

Hapag-Lloyd and merged Japanese container carrier Ocean Network Express (ONE) are the latest box shipping lines to join the IBM/Maersk Line-led blockchain initiative TradeLens.

The news means more than half the world’s container shipping capacity is part of the TradeLens project, following the addition of MSC and CMA CGM at the beginning of June. Of the top six largest box carriers, just Cosco/OOCL is not part of the project.

“The addition of more leading carriers to TradeLens will help global supply chain customers expand and explore the benefits of digitisation and deliver new opportunities to the increasing number of TradeLens ecosystem participants across the global supply chain,” said Vincent Clerc, chief commercial officer at Maersk.

“As a neutral industry platform, TradeLens offers supply chain visibility, ease of documentation and the potential of introducing new products on top of the platform. These attributes bring new opportunities for the Maersk transformation towards becoming an end-to-end container logistics company improving the experience and services we offer the customers,” he added.

Hapag-Lloyd and ONE will each operate a blockchain node, participate in consensus to validate transactions, host data and assume the role of ‘trust anchors’ – or validators – for the network.

Both companies will be represented on TradeLens’ advisory board, which includes members from across the supply chain to advise on standards for neutrality and openness.

“TradeLens has made significant progress in launching a much-needed transformation in the industry, including its partnership model,” said Martin Gnass, managing director of information technology at Hapag-Lloyd.

“Now, with five of the world’s six largest carriers committed to the platform, as well as many other ecosystem participants, we can collectively accelerate that transformation to provide greater trust, transparency and collaboration across supply chains and help promote global trade.”

A senior TradeLens executive added that blockchain technology was ideally suited for large networks of disparate partners, given that established a “shared, immutable record of all the transactions that take place within a network and enabled permissioned parties access to secured data in real time”.

Bridget van Kralingen, senior vice president of global industries, clients, platforms & blockchain at IBM, explained: “Through improved trust, simplicity and improved insight into provenance, blockchain solutions such as TradeLens are delivering proven value across business processes for our clients and their ecosystems.

“Massive new efficiencies in global trade are now possible, and we’re seeing similar effects across the food industry, mining, trade finance, banking and other industries where the value of blockchain is more apparent than ever before,” she added.

Source: The Loadstar