SIMIC

It's been a first quarter bonanza for ocean carriers. Cosco Shipping, which banked a $2.39 billion net profit in the first quarter, and Maersk, enjoyed an operating profit up fivefold year on year.

"The increase in profit is mainly due to the recovery of cargo demand and an increase in the short-term freight market," ONE said in an earnings statement.

ONE, formed in 2017 by a merger of the container divisions of NYK, Mitsui OSK Line, and "K" Line, attributed the substantial improvement in profitability.

ONE's average freight rate per TEU increased 53 per cent on the Asia-Europe trades during the year and 25 per cent on the transpacific, more than compensating for a 2.8 per cent drop in annual volume to 11.9 million TEU.

ONE said after demand fell with Covid-19 in March 2020, a recovery in volume was achieved from October 2020 through March 2021, when demand increased sharply, especially after Chinese New Year in February.

The carrier handled 2.76 million TEU on the head haul Asia-North America routes during its fiscal year, up 2.6 percent, as unrelenting US demand kept ONE vessels at 100 percent utilisation levels.

The Asia-Europe westbound trade saw volume decline almost 15 per cent during the year to 1.56 million TEU, but the second-half rebound was strong enough to hold ship utilisation at an average of 99 per cent for the year.

In its 2019 financial year, ONE's utilisation on the transpacific was 91 per cent, with Asia-Europe vessel utilisation at 93 per cent. With full ships on its head-haul trades, ONE was able to take advantage of elevated rate levels. Data from rate management platform Xeneta show the average Asia-North Europe spot rates in the first quarter of 2021 were 460 per cent higher than the first three months of pre-pandemic 2019. Average Asia-US West Coast spot rates in the first quarter were 250 percent above 2019.