Peak Season Off to a Slow Start
Orient Overseas Container Line (OOCL), reported a doubling of net profit to a record US$5.7 billion in the first six months of 2022 compared with $2.8 billion a year earlier. Revenue for the half-year surged 52 percent to $11 billion. The surge in financials was driven by elevated rate levels and came despite total liftings falling 7 percent to 3.6 million TEU, according to IHS Media.
According to the Chairman of OOIL, “Our ships are sailing full on our main long-haul trade lanes and are forecast to continue to be fully loaded in the coming weeks, but there has not been much evidence, so far, of the kind of significant seasonal uptick that is often a feature of the traditional trans-Pacific peak season.”
Indeed, the peak season for holiday goods headed into the US market has been slow. US containerised imports from Asia grew only 2.2 percent in the May-July period from the February-April period of this year.
While that is similar to last year’s growth of 2.4 percent, it is a much slower pace of growth compared to the same months in 2017 (16.6 percent), 2018 (17.7 percent), and 2019 (19.4 percent), according to PIERS the IHS import and export data tool.
Mr Wan pointed out that while consumers are still purchasing new goods, they are not necessarily the same products bought last year so there has not been a complete return to pre-pandemic patterns of spending. “Even if US retail inventory-to-sales ratios remain low, we note some year-on-year increases in absolute levels of US inventory,” he said.
In contrast though, whilst this slower than pre-COVID, uptick in volumes is off to a slow start, ocean carriers are still charging a premium on rates when compared to 2019 and before.
Revenues on all of OOCL’s major trades – the trans-Pacific, Asia-Europe, intra-Asia, and trans-Atlantic – soared on the back of the cargo demand-vessel supply imbalance. The trans-Pacific remained OOCL’s biggest revenue earner, generating $3.9 billion in the first half, up 78 percent year on year despite liftings falling 14 percent to 951,611 TEU.