Hanjin Improves Performance with Rate Recovery

Hanjin shipping sees room for more rate hikes in 2013

South Korean based Hanjin Shipping (Hanjin) reports that it increased its total sales to KRW 2.92 trillion ($2.577 billion) in the third quarter of 2012, from 2.47 trillion ($2.3 billion) in the same period last year.

Hanjin said it improved its performance by increasing rates on Trans-Pacific and Asia-Europe routes, increasing its container shipping volume during peak season, and reducing costs.

The company achieved a KRW 96.8 billion ($88.7 million) operating profit, but had a net loss of KRW 47.3 billion ($43.37 million) due to foreign currency translation loss of KRW 77.8 billion ($71.34 million) as the South Korean won appreciated against the U.S. dollar.

Its container shipping volume for the year so far rose 6.4 percent year-over-year to 3.32 million twenty-foot equivalent units (TEU), up from 3.12 million TEU in the period last year.

Hanjin predicted that container shipping in the Trans-Pacific market will be sustained in the fourth quarter of 2012 as holiday shopping boosts the market and that 2013 should bring higher shipping rates due to U.S. economic growth from the housing market recovery.

"In the Asia-Europe routes, container freight rates are expected to stabilize gradually as carriers continue in eco-steaming, idling, service rationalization and rate restoration," the company said.

"In bulk sector, winter's heating and stock piling demand, implementation of the Chinese government's infrastructure development plan and additional measures to stimulate the economy are expected to bring about some recovery in cargo volume in the 4th quarter."

In the second quarter of 2012, improvements in the company's Trans-Pacific and Asia-Europe rates helped pull its container division out of the red for the first time since Q1 2011.