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May 28 2018

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May 28 2018 | The Journal of Commerce 7 www.joc.com Spotlight JOC Top Importers and Exporters Global Trade Atlas: Global Import Export Commodity Trade Data Unlock growth possibilities with a global view of trade. Explore opportunities with the Global Trade Atlas: Visit ihs.com/GTA to enjoy a no-risk trial of GTA 181176365-MT-1017 Arab Shipping Co. (UASC) that the Ham- burg-based shipping line merged with in late 2017, making year-over-year comparisons di•cult. The operating result before interest and taxes (EBIT) was $64 million, and the net result was a loss of $41 million. "We have had a solid start into the current year, but the market environment is challenging," said Rolf Habben Jansen, chief executive o•cer of Hapag-Lloyd. "Freight rates have been under pressure, bunker costs and trucking cost in some important markets were up and we faced a weaker US dollar, whereas higher transport volumes and synergies supported the result." Through April, the average price per ton of IFO 380 bunker fuel across the ports of Rotterdam, New York-New Jersey, and Singapore rose 21.6 percent from the start of 2017 to $387.48, according to I HS Markit data. UASC helped revenue reach $3.2 billion in the first quarter, up 42 percent, and volume hit 2.9 million TEU. However, average freight rates fell 2.6 percent to $1,029 per TEU, a clear indi- cation of a weak market burdened by excess capacity. Yang Ming reported a widening first-quarter loss despite increasing revenue and volume in the first three months of the year. The Taiwan carrier's 1.22 million TEU in the first quarter was 9 percent more than in the same period of 2017, and reve- nue was up 2.6 percent to just over $1 billion year over year. HMM's net loss in the first quarter widened to KRW175 billion ($164.94 million) from a loss of KRW131 billion last year Fuel and charter costs pressure carriers Container lines are o¡ to a slow start in 2018 judging by the first-quarter reports from Hapag-Lloyd, Hyundai Merchant Marine (HMM), and Yang Ming, which are facing sharply rising bunker fuel prices, a weak spot rate market, and higher charter costs. Hapag-Lloyd and Yang Ming managed to reduce their net losses, but that wasn't enough to move them into the black. The rising costs are also expected to influence the first-quarter results of Maersk Line — scheduled to be released on May 17 — with investment bank Je¡eries forecasting the Danish carrier will report its net profit "just ahead of breakeven." The container shipping industry last year had a collective operating profit of $7 billion — the highest rate since 2014, according to Drewry. By the third quarter, HMM was the only carrier that had not returned to profitability, Drewry said in a May 2 webinar. Hapag-Lloyd's first-quarter performance included the figures of United $275 $295 $315 $335 $355 $375 $395 Jan- 17 Apr-17 Jul-17 Oct-17 Jan- 18 Apr-18 Price per metric ton Bunker fuel prices climb Source: IHS Markit © 2018 IHS Markit Average cost of ISO 380 bunker fuel across Shanghai, New York-New Jersey, and Rotterdam

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