HONG KONG (Dow Jones)–Orient Overseas (International) Ltd. (0316.HK) plans to further raise rates for container shipments on the North Europe to Asia route from May 15, the company said Thursday, in a bid to restore its profitability following a weak first-quarter performance.
The Hong Kong-based company’s container freight unit Orient Overseas Container Line, or OOCL, said in a statement it plans to increase freight rates by US$200 per 20-foot-equivalent unit, or 40-foot-equivalent unit, for all shipments through the trade route.
The latest move is OOCL’s fourth rate hike on the same route since the start of 2012. Last Sunday, it raised the rate on the North Europe to Asia route by US$200 per TEU, and by US$300 per 40-foot-equivalent unit, or FEU, adding to a combined US$400 per container hike for cargo moving from North Europe to Asia in February and March.
The container shipper didn’t disclose its existing freight rate on its North Europe to Asia route, but it noted the current freight rate is below the required level to cover its operating and transportation costs.
In a separate statement Thursday, Orient Overseas said its first-quarter revenue fell 0.9% to US$1.32 billion from US$1.33 billion a year earlier, dragged by a 6% decline in average revenue per TEU. The company doesn’t report quarterly profit figures.
The company, which is controlled by the family of former Hong Kong Chief Executive Tung Chee-hwa, said its total shipping volume during the quarter was up 5.4% to 1.24 million TEUs from 1.18 million TEUs, while the overall load factor was 5.0% lower than the same period in 2011.
Orient Overseas, which ships finished and semi-finished goods ranging from toys to garments to the West from Asia, in March said it expects trading conditions in 2012 to remain tough, after posting a 90% fall in 2011 net profit, as high fuel costs and oversupply of capacity continue to weigh on its bottom line.
-By Joanne Chiu, Dow Jones Newswires