In strong demand and high utilization, Zim Integrated Shipping Services (Zim Integrated Shipping Services) for the transfer of West Coast cargo significantly increased its Asia-US East Coast all-water service vessel size.
the company has already placed its first order of two 10 LNG-powered 15,000 teu vessels on trade routes, with a third 15,000 teu vessel due to be delivered in early June, another four by the end of the year and the last three by early 2024. Xavier Destriau, Chief Financial Officer of Zim, said: "Benefiting from very strong utilization, we deployed these vessels on the East Coast as a way to replace 10,000 teu vessels to reduce unit costs.
Zim posted its first quarterly loss in 11 quarters. The decline in turnover on major trade routes and the decline in interest rates have severely affected profitability. Transportation volume in the trans-Pacific region fell nearly 4% year-on-year in the first quarter to 274000 TEUs. Box, down nearly 6% from the previous quarter. But Destriau said that was more due to fewer Asian shipments to the US West Coast than to the East Coast.
Spot prices from Asia to the East Coast of the United States were $2,300 per FEU, down 78% year-on-year, according to Platts Global Business. This week Asia-US West Coast spot prices were $1,300/FEU, down 84% from the same period last year.
The interest rate level reflects the weak demand. Due to the sharp drop in the interest rate level, Zim suspended its expedited Sino-US West Coast e-commerce Xpress(ZEX) in March, while expanding the service from Asia to the US East Coast.
Destriau said that we have been working hard to ensure that we deploy capacity where it makes more sense for us to generate profits, and this quarter was significantly affected by the shift. Distribution of tonnage between different trade routes.
US West Coast Labor Uncertainty
Zim saw a positive market environment in the all-water east coast trade, likely due to the lack of a US west coast agreement between the International Coastal and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA), which led to cargo diversion.
Destriau said that this uncertainty may cause some of our shippers to still push cargo to the East Coast rather than back to Los Angeles, which may be a positive impact on our continued U.S. East Coast and Gulf of Mexico operations.
carriers have to be "quite creative" in ensuring that vessels carry lighter cargoes, according to the latest Panama Canal draft restrictions, freight volumes from the East Coast and Gulf trade are available. "We're not happy with the price, but from a sales volume standpoint we're not bad," Destriau added.
Estimated compared to pre-epidemic, container shipping industry costs have risen by more than 20%, Zim last year signed a long-term LNG supply agreement with Shell and in the first quarter in Kingston, Jamaica, completed the Zim vessel's first LNG refueling, which will become its 15,000 teu vessel's regular refueling port.
Zim President and CEO Eli Glickmann said that as the first liner company to operate LNG vessels on the Asia-US East Coast trade, we are reducing per TEU costs by replacing smaller vessels with larger vessels.
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