NYK Line Returns to Profit, Says Bunker Prices Fell 9%

NYK Line is using navigation technology to reduce fuel consumption

Japanese shipping line Nippon Yusen Kabushiki Kaisha [TYO:9101] (NYK Line) reports it returned to a profit in the six months ended September 20, 2013, with a net income of ¥20.5 billion ($208 million) on revenues of ¥1.1 trillion ($11.1 billion), compared with a loss of ¥4.1 billion ($41.5 million) on revenues of ¥944 billion ($9.6 billion) in the same period last year.

The company, which also turned a profit for its full 2012 fiscal year, ended March 31, 2013, said it expanded slow steaming throughout its fleet and made a number of efforts to increase its fuel efficiency.

The shipping line's bottom line was also helped by falling bunker prices, with NYK reporting it paid an average $628.66 per metric tonne (pmt) during the six months, down almost 9 percent from $688.70 pmt for the same period last year.

"Measures were taken to reduce vessel operating expense and ship costs through the return of uneconomical vessels and the introduction of newly built ultra large container ships with high fuel efficiency," it said.

"Efforts were also made to reduce fuel consumption by raising the efficiency of vessel navigation through the use of onboard broadband communications to optimize route selection using real-time meteorological and sea condition data."

NYK Line said there were signs of economic improvement around the world over the six months, but supply and demand of shipping capacity remained unbalanced.

"In the container shipping division, while global cargo movement increased, freight rates declined due to an oversupply caused by the delivery of large amounts of newbuilt tonnage and assignment of ultra large ships on Asia-Europe routes, which caused cascading down of larger vessels from Asia-Europe to other routes," the company said.

"Although there were several attempts to restore rates over the summer mainly on Asia-Europe routes, a substantial rate restoration failed to materialize."

The company said it made efforts to rationalize service on East-West routes through the G6 alliance and engaged in a "major service reorganization on Intra-Asia routes."

NYK Line has been recognised in recent years for its fuel-saving efforts.