Wide Margins for Box Shippers Due to Cheaper Bunkers Not Expected to Last

by Ship & Bunker News Team
Tuesday September 22, 2015

Despite cheaper bunkers having lead the majority of carrier lines to experience increasing margins among falling revenues, the ongoing decline of freight rates is expected to impact the profitability that companies have enjoyed so far, Drewry reports.

According to the consultancy firm, 16 out of the 20 largest carrier in lines in the world saw their combined revenues contract 5 percent to $60 billion, even though plummeting bunker prices saw their average operating margins rose to 5.6 percent from 1.7 percent last year.

However, the firm warned that carrier lines can expect to see margins narrow as plunging rates take their toll, even with the trend of larger containerships also helping to widen margins.

"Ultimately though, events outside their control are dictating bottom lines and as such that represents a serious risk to sustainable profitability," Drewry said.

In the meantime, companies can reportedly expect to see satisfactory full-year results no matter fourth quarter performance, as profits from the first nine months of the year are expected to suffice.

Last week, Drewry also reported that lower bunker prices had halved the slot cost benefit for mega boxships.

Ship & Bunker News Team
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