The giant Japanese container line, Ocean Network Express (ONE) expects to report a much larger loss than previously estimated, according to a business forecast lowered for the first half and full year.
Initially, in the first half of the Japanese fiscal year of 2018, that is, the period from April to September of 2018, ONE expects its loss to reach USD 310 million, much higher than the USD 38 million previously forecast. Similarly, for the full fiscal year, which covers the period from April 2018 to March 2019, the company anticipates recording a loss of USD 600 million, a significant reduction compared to the expected gain of USD 110 million.
The main reason that affects the commercial performance of the company is the fall in reserves and utilization, driven by the impact of the initial problems that arose immediately after the start of services in April 2018. Likewise, the maritime line assured that It has already taken into account the impact of the trade friction of the United States and China in its second semester perspective.
ONE explained that the initial problems were related to the reception of the reservation and the documentation operations that had been delayed because “the ONE staff was completely familiar with the newly introduced IT system and they also had insufficient staff and the staff was not enough. This caused significant inconveniences for the clients. ”
“ONE tried to recover the lost ground during the high season from July to September, but the changes and utilization remained below the outlook because the negative impact remained on its main routes Asia-North America and Intra-Asia,” said ONE .
The consolidated container business of the Japanese trio, NYK, MOL and K-Line, indicated that the initial problems related to ONE’s services have already been resolved.
“ONE Holdings and ONE are working hard to restore customer confidence and further improve the quality of service. However, clearing and utilization are still on the road to recovery, and the goal of additional cost reduction to address bunker price increases is expected to be lower than the target in the previously announced forecast. Therefore, ONE also made a downward revision in the annual commercial forecast announced previously. “
