2023 too difficult to predict, says ONE

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Container line ONE did not include a full year forecast for 2023 in its 2022 results, saying the outlook for 2023 is extremely difficult to predict.

In its presentation of full-year 2022 results, Ocean Network Express (ONE) said that the container market is in the midst of major changes, including the consequences of global supply chain congestion, macroeconomic shifts and shifts in trade flows due to war and other geopolitics and changes in consumer behavior.

“Under these circumstances, it is extremely difficult to provide any reasonable business guidance at this time and full-year guidance for fiscal 2023 has yet to be determined,” ONE said.

Other container shipping lines have stressed the difficulty of forecasting 2023, but generally presented figures showing revenue and earnings falling as demand and rates fall – or normalize, as Maersk put it – through the year.

Maersk’s best-case scenario for 2023, when it released its 2022 results in February, was an 84% year-over-year earnings decline. This result is in line with a forecast by Blue Alpha Capital analyst John McCown, who predicted an 80% drop in earnings at major container lines in 2023.

ONE’s 2022 results showed profit of $15 billion, down $1.7 billion year-on-year as market conditions softened in the second half of the year. A drop in demand was more pronounced in the fourth quarter, ONE said, as the supply-demand balance weakened despite empty sails.

Improved freight rates in 2022 reflect stronger contract rates and conveniently offset lower spot rates later in the year. These stronger freight rates were offset by higher bunker costs, higher operating costs, higher variable costs and the decrease in lifting.

ONE said it has not felt any significant impact from the planned delivery of several ships to the market in recent months.

The company’s response to the changing market has been to extend the Chinese New Year blank sailing period into March and April, route vessels around the Cape of Good Hope to accommodate capacity, increase port coverage, slow down steamships and deploy larger ships in the East -West acts ahead of time.

Source: News Network

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