Hanjin sees growth in cargo but falling profits

Monday, 21 February 2011 00:01 - - {{hitsCtrl.values.hits}}

SEOUL (Reuters): Hanjin Shipping, the world’s ninth biggest container shipper, predicted global container shipments would grow up to eight per cent this year, supported by bright trans-Pacific trade prospects.

“A return to normalcy – that is our expectation and hope,” Chief Executive Kim Young-min told foreign media last week.

However, given a better-than-expected 2010 for the container market, Kim did not see industry profitability improving amid high oil prices.

“(Hanjin) aims to post an operating profit this year of a bit less than last year’s figure,” he said.

The global container industry, a key indicator of world economic growth, is still far from the kind of full-blown recovery that would justify carriers’ long-term investments, Kim said.

Kim, also the chairman of the Transpacific Stabilisation Agreement (TSA), said TSA members would continue to seek container rate increases of $400 per 40-foot container (FEU) for cargo moving to the US West Coast and $600 per FEU for all other cargo.

Kim was more optimistic about trans-Pacific trade than the European line, predicting high-single digit growth in Hanjin’s cargo shipments this year for the former.

“There are some challenges in terms of supply and demand in the European region as new large vessels are expected to run,” Kim said, asked about rate changes for Asia-Europe trade.

Hanjin, for which 80 percent of revenue comes from container shipping, plans to foster its bulk business in the long term to balance its portfolio, which was recently hit by the Australian floods.

Hanjin’s cargo traffic through Egypt’s Suez Canal was almost back to normal after anti-government protests in Egypt caused re-routing of its container ships, Kim added.