A recent report, OOCL, a subsidiary of COSCO, revealed a staggering 63% year-on-year drop in its second-quarter revenues for 2023. The company attributed this decline to the collapse of freight rates, which offset the effects of increased shipments. According to their preliminary operational update, OOCL’s quarterly revenues amounted to USD 1.98 billion, significantly lower than the USD 5.28 billion recorded during the same period last year.
Although OOCL witnessed a slight uptick in shipment volumes, which increased by 7% compared to the first quarter of 2023, the average freight rates experienced a drastic 15% decrease on the same basis. Notably, the Transpacific and Asia-Europe routes bore the brunt of the year-on-year revenue losses. However, the situation varied slightly from one quarter to another.
The Transpacific revenues remained unchanged in the second quarter compared to the first, as higher shipment volumes compensated for the lower rates. (Refer to the accompanying table on the left.) Meanwhile, Transatlantic revenues plunged by 25% quarter-on-quarter, while Oceania and Asia-Europe revenues declined by 10% and 9%, respectively.
OOCL’s parent company, COSCO, announced higher operating profits for the second quarter compared to the first, according to preliminary indications released last week. Both companies are expected to disclose detailed financial results next month.
The significant drop in OOCL’s revenues highlights the challenges faced by the shipping industry due to the collapse of freight rates. As the sector awaits the detailed financial reports, industry analysts are closely observing whether this trend will persist and its potential implications for the overall market.
Source: OOCL, Alphaliner
