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Questions remain whether intra-Asia carriers can profit from volume

CONTAINER shipping lines continue to see potential in intra-Asia trades, while others say it continues to be challenging to profitability.

Cosco and Orient Overseas Container Lines (OOCL) may implement different strategies befitting their size and particular strengths.

For example, Cosco with a fleet of 358 vessels and capacity of 1.8 million TEU, seemed to quite easily raise third quarter volume 32 per cent year on year to 1.5 million TEU, making this segment the second highest in volume terms apart from domestic China boxes.

All while it also manages to increase revenue from this trade lane by half to CNY4.5 billion (US$678.8 million), reported Colchester's Seatrade Maritime News.

However, OOCL's intra-Asia volume over this period declined by seven per cent year on year to 715,693 TEU, which led to a 13 per cent increase in revenue to $456.7 million.

Noting that one container out of six is on the intra-Asia trades, APL CEO Nicolas Sartini said that while it is a competitive market, the volumes are huge and expanding fast.

"Yes it's a difficult market but you can also be profitable in this market and it will certainly be one of our priorities in future," Mr Sartini was quoted as saying.

"The key challenge is managing the volatility in supply and demand because there is a lot of seasonality in our business," said global CEO Japanese liner merger ONE, Jeremy Nixon.

"It's about the ability to flex the network and the carriers do need to have a better way of managing the capacity in line with demand," said Mr Nixon.