HMM has a significant improvement in its bottom-line for the first half of 2020 but warned about murky prospects for container shipping.
“Market outlook remains uncertain as coronavirus can re-emerge for the upcoming winter season and growing geopolitical tensions between US and China are definitely one of the most important variables,” said the South Korean carrier in a results release.
The company narrowed its net losses to $31m in the period from January to June from $314m during the same period in 2019. It reported $23m net profits in the second quarter versus $166m deficits a year ago.
Revenue in the six months dipped 0.9% year on year to $2.2bn while handling volume dropped 20.9% to 1.8m TEU, indicating stronger freight rates this year.
“The profitability in the main East-West trade lanes contributed to enhanced business performance,” said HMM.
In a Wednesday report, noted that spot rates on the North China to US West Coast trade had surged to their highest level ever – about 120% higher than the year-ago level – even though carriers were reinstating blanked sailings.
“The combination of higher rates and neutral or expanded capacity indicates strong consumer demand, with Chinese exporters wanting to ship as much product as possible before a potential second Covid-19 wave,” said the consultancy.
HMM forecast a rather balanced market in the Asia-North Europe trade, but it said the situation in intra-Asia trade will be challenging amid rising competition between carriers and oversupply of capacity.
HMM is now a full member of The Alliance, which also consists of Hapag Lloyd, Ocean Network Express and Yang Ming.
It took delivery of containership HMM Southampton earlier this week, the ninth unit out of a dozen 23,792-TEU series containerships ordered in 2018 at two Korean yards.
The ship will join The Alliance’s Far East – Europe service FE3 at Yantian, to replace Hapag-Lloyd’s 14,993 TEU vessel Al Murabba.