HMM says container freight rates on the transpacific should remain strong in the short term but the outlook is clouded by Covid-19 and geo-political tensions.
The South Korean shipping company bounced back to KRW28.1bn ($23m) profit in Q2 2020 compared to a KRW200.7bn in the same period in 2019. Revenues were down 1.6% in Q2 2020 at KRW1.38trn compared to the same period a year earlier.
Despite the impact on volumes from Covid-19 container lines have successful in managing capacity through blank sailings to maintain freight rates. Volumes dropped 20.9% to 1.78m teu in the first half of 2020, compared to 2.25m teu in the same period of 2019.
HMM said profitability was based on its membership of THE Alliance with Hapag-Lloyd, Ocean Network Express and Yang Ming, and the deployment of its 24,000 teu newbuildings, the largest containerships in operation today. “Total revenue and container handling volumes have been impacted by the Covid-19 pandemic,” it said.
Looking ahead HMM said it expected freight rates on the transpacific to remain strong over the short-term, the Asia – North Europe trade was fairly balanced in terms of demand and supply, and the intra-Asia trades would remain challenging.
“The profitability in the main East-West trade lanes contributed to enhanced business performance. However, market outlook remains uncertain as coronavirus can re-emerge for the upcoming winter season and growing geopolitical tensions between US and China are definitely one of the most important variables,” HMM said.