Rickmers' Q1 DPU stays flat at 0.6 US cent
Shipping trust posts profit of US$8.2m, down 12% year on year from US$9.3m
RICKMERS Maritime reported distribution per unit (DPU) of 0.6 of a US cent for the first quarter ended March 31, 2012, that was unchanged from the year-ago period.
The shipping trust turned in "stable" quarterly results, said its trustee-manager Rickmers Trust Management (RTM).
Charter revenue of US$35.7 million was almost flat from last year's US$35.9 million. Net profit was US$8.2 million, down 12 per cent year on year from US$9.3 million.
Cash flow from operating activities dipped 3 per cent to US$24.9 million from US$25.7 million in the year-earlier period because of scheduled dry docking for its ships and 29 off-hire days for the container ship Kaethe C. Rickmers when it was in between employment contracts.
Fewer box ships lying idle but supply set to increase
Overcapacity still not addressed by owners, operators
The inactive containership fleet has fallen for the first time since August 2011, driven by carriers which are readying themselves for the busy peak summer months ahead.
However, optimists who think it may signal the turning of a tide towards a better match between supply of ships and demand for cargo – and therefore herding shipping lines back to profitability – think again.
On the one hand, data from Alphaliner shows that the idle boxship fleet as of Mar 26 declined about 75,000 twenty-foot equivalent units (TEUs) over two weeks. The mothballed fleet of container vessels now stands at 5.3 per cent of global capacity or 838,000 TEUs, down from 5.8 per cent or 913,000 TEUs.
The reductions have all come from container lines putting back their idled ships into service to handle more cargo demand in the summer, whereas non-operator owned idle ships have stagnated at 397,000 TEUs.
Notably, carriers have decided to yank larger vessels out of lay-up. The number of idled vessels capable of carrying 7,500 TEUs or more have dropped to 12 units from 18.
‘Freight rates are about demand and supply. Re-introducing idle capacity will increase the supply which weakens the utilization. This will affect the rates negatively,’ said Jason Chiang, senior manager at Drewry Maritime (Asia).
Moreover, Drewry Maritime Research said that idled container tonnage remains relatively low and the overcapacity situation is still underaddressed by ship owners and operators today.
During the throes of the global financial crisis in 2009, about 12 per cent of the global box ship fleet were made inactive.
‘Until the inherent structural capacity is truly tackled, we will continue to have periodic and violent bouts of overcapacity that will keep rates and operating margins yo-yoing up and down,’ said Neil Dekker, head of Drewry’s container research.
There is a lot more room yet for more lay-ups.
In 2012, 59 ‘large’ container vessels of over 10,000 TEUs capacity will be entering the global fleet. It is almost for sure they will be deployed on the already overcrowded Asia-Europe long-haul trades, which Credit Suisse estimates to have about 330,000 TEUs worth of capacity a week.
Said Mr Chiang: ‘The liners’ hands may be forced to their last option of idling. Another 7.4 per cent of supply will be added to the system, the simple answer is that a similar amount of existing capacity should be idled to allow for the introduction of new capacity.’