Cosco Shipping Holdings blamed excess capacity and weak volume growth for a 29 percent year-over-year decline in profit, to 237.2 million Hong Kong dollars ($30.5 million), a far better performance than the $1.4 billion loss the company warned of in late January.
While profit fell by nearly a third, revenue increased 24 percent to 7.4 million Hong Kong dollars, the parent company of China Cosco Shipping said in an earnings release. Cosco also said that it would seek to develop a “shipping services industrial cluster” to “offer supporting services for shipping with independent profit drivers.”
Cosco Shipping Holdings also provided some details about how it plans to operate in the future. Cosco’s profit is unique compared with other ocean carriers. Zim Integrated Shipping Services, Maersk Line, CMA CGM, and Orient Overseas Container Line all reported losses for their full year, although they said that rates and volumes strengthened in the fourth quarter.
Those carriers’ reports of growth in the fourth quarter were recently bolstered by news that global container trade growth increased 4 percent in the quarter compared with a decline of 0.4 percent in the same quarter of 2015, according to Alphaliner.
Global growth for the full year amounted to 1.8 percent, up 0.4 percentage points from 2015.
US imports and exports broadly followed the same pattern, according to data from PIERS, a sister division of JOC.com. Container growth accelerated throughout the second half, with third-quarter traffic rising 1.5 percent and fourth-quarter volume up 7.4 percent.
Cosco, along with CMA CGM/APL, Evergreen Line, and OOCL, is a member of the Ocean Alliance, which launches on April 1. The alliance earlier in March said that it did not need an emergency fund in case a member carrier failed in a manner similar to Hanjin Shipping because the financial health of its members was sound.