Orient Overseas (International) Ltd. (OOIL, 00316.HK) believes the shipping industry will continue to be dogged by overcapacity, the company’s acting chief financial officer Alan Tung said on Monday.
Global shipping demand growth this year is expected to be 5.3 percent while supply will expand by 5.8 percent, Tung told reporters following the release of his firm’s 2013 results. However, he noted that the situation is better than last year when the supply-demand mismatch stood at 1.5 percentage point.
Intra-Asia trade will face the greatest stress as freight rates will see downward pressure due to increased cascading tonnage in the region, which means that smaller carriers will be replaced by larger ones, Tung said.
OOIL reported a net profit of US$47.04 million for 2013, down 84 percent from the previous year, as revenue fell 3.5 percent to US$6.23 billion.
The group will continue to work closely with other ocean carrier members in the G6 Alliance that was established in 2011 to lower costs and boost efficiency, Tung said.
Orient Overseas will take delivery of two new vessels before 2015, and its terminal in Long Beach in California will be completed in 2019. Tung said the company is still studying new investment strategies.
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