Mounting costs outrunning revenue hopes despite double-digit volume growth

DESPITE double digit volume growth forecasts for container shipping through to 2012 operating costs "may spoil the party" by cutting revenue, said Philippe Hoehlinger, consultant and former vice-president of risk at SeaAxis.


Mr Hoehlinger, author of seven editions of the SeaAxis Macro report on container shipping, said global cargo volume is up 10.7 per cent this year and 11.2 per cent into 2012 with freight rates increasing by 10 per cent first quarter and 15 per cent second quarter.


Profits gained by higher freight rates will be damaged by charter rate increases of 30 per cent in the first quarter, increased shipbuilding costs and rising bunker fuel now standing at above US$600 a barrel.


Paris-based Alphaliner says rates are "trending down" and unlikely to alter before peak shipping season mid-summer. The volatile rate environment is seen by some as a key reason for profit loss already experienced in first quarter losses for bigger players APL, Hanjin, Hapag-Lloyd and CSAV.
(Source:http://www.schednet.com)