Cosco's shipping revenue rises but prices pressured
China Cosco Holdings, which controls the mainland's biggest container line and terminal developer, said revenue from its shipping division rose 7.6 per cent in the third quarter, boosted by continued strong demand from the west for mainland-made goods. However, its pricing power slipped.
Sales for its wholly owned maritime transport subsidiary Cosco Container Lines reached 9.2 billion yuan, up from last year's 8.56 billion yuan, as its fleet moved 1.38 million boxes for the three months, up 16.4 per cent.
The trade lanes between Europe and Asia showed the fastest growth, expanding 25.6 per cent year on year to 336,048 teu (20-ft equivalent units).
However, the teu revenue for the quarter fell 7.6 per cent year on year to an average of 6,678.20 yuan each as new shipping capacity on the world's biggest trade lanes eroded the carrier's pricing power. Europe led the fall in per-unit earnings, shrinking 8.8 per cent year on year to an average of 8,555 yuan each. The transpacific trades faded marginally year on year to 10,913 yuan per teu.
'The decline in overall earnings reflects market pressures in container shipping, one key area of the group's business,' chairman Wei Jiafu said at the group's interim results announcement last month. 'As an integrated shipping and logistics service provider, however, the group has been able to hedge risk through occupying businesses across the container-shipping value chain.'
Cosco Pacific, the group's separately listed terminal operating arm, handled 28.9 per cent more boxes for the quarter, or 8.88 million teu, after benefiting from full operations at four ports that came on line within the past year. Cosco Holdings did not disclose quarterly earnings for the division.
