Declining Freight Rates Puts Pressure On Shippers

• Bulkshipper Wisdom Marine Lines Co said yesterday that pre-tax profits fell 4% month-on-month to NT $ 991 million (US $ 35.75 million).
• It may be due to the fact that freight rates for small and medium-sized vessels fell. But optimistic about this month’s interest rate outlook.

A recent news published in the Worldakkam states that bulk shipper profits decline at lower rates.

Shippers affected by fall

The fall affected shippers, as more than half of the fleet are small and medium-sized vessels. Wisdom has 17 small handysize vessels and 52 handysize vessels in its 134 fleet, company data said yesterday.

The Baltic Handysize Index, which tracks the price of shipping raw materials via such vessels, fell below 1,600 points at the end of last month, compared to a peak of over 2,000 points in October.

Meanwhile, the Baltic Dry Index, which tracks the rate of shipments of all types of vessels, fell below 3,000 points last month from a peak of over 5,000 points in October, mainly due to lower demand for goods in China and improved traffic in China. I did. port.

Conservative market

Wisdom said in a statement that prices for small and medium-sized vessels fell last month as the market became more “conservative”, but continued demand for raw material transportation should support this month’s price recovery.

Shippers, whose sales set a new record for seven consecutive months until October, posted sales of NT $ 2.03 billion last month, down 2.4% month-on-month.

Fewer business days

The company believes this decline is due to lower rates and fewer business days.

Pre-tax earnings per share also fell from NT $ 1.38 in October to NT $ 1.33 last month, according to company data.

However, the data show that last month’s shippers’ revenues and pre-tax profits increased 92% and 12-fold on an annual basis, respectively, due to the low comparison base last year.

Details of Wisdom’s Revenue

In the first 11 months of this year, Wisdom’s revenue reached NT $ 17.1 billion, up 58% year-on-year, and profit before tax reached NT $ 7.16 billion compared to a net loss of NT $ 171 million in the previous year.

Bulk shippers say the outlook for next year is bright, and as the company owns vessels that are more efficient than other shippers, tighter regulations on ship energy efficiency will benefit Wisdom.

He added that the new rules are expected to come into force next year and are expected to affect about 80 percent of all vessels on the market.