Intra-Asia lines battle excess capacity and low rates

Wan Hai Lines has reported first half profits to TWD299 million (USD9.5 million), a 90% decline year-on-year. Revenue fell by 15.7% to TWD28.4 billion. In the second quarter of 2016 Wan Hai Lines’ revenue was TWD14.3 billion, down by 13.3% from a year earlier. Its profit was TWD254.2 million, down by 76.6%. Almost 90% of services operated by Wan Hai Lines are in the intra-Asia trade, and the rest are to America.

RCL cut its losses to THB183 million (USD5.2 million) compared with THB243 million in the first quarter. The performance fell short of the second quarter of 2015 when RCL posted a profit of THB55 million. Rates fell nearly 3% compared with the previous quarter, with a 9% increase in volumes to 258,846 teu.

"Due to the increasing spill over of tonnage into intra-Asia market and insufficient demand, freight rate decreased 16.2% year-on-year," RCL said.

For OOCL, intra-Asia is the largest trade in its portfolio at 37% (the carrier includes the Australasia trade in this segment) and the company reported a 14.7% decline in revenue on these routes during the first half. Liftings increased by 4.5% to 1.5 million teu.

Last year, the average rate was USD407 per teu for intra-Asia services, and the first half of 2016 saw it remaining between USD360 and USD363 per teu.

(IHS Fairplay)