Risk of volatility in shipping markets and vessel supply and demand

「Container shipping: Freight market conditions were volatile under the impact of increased vessel supply from newbuilding deliveries, tariff policies, the situation in the Middle East and other factors, and consequently fell below the level of the previous fiscal year.」

「新造船の竣工による 船舶供給量の増加に加え、関税政策や中東情勢等の影響を受け、運賃市況は不安定に推移した結果、前年度の水準を下回りました。」

「Container shipping: Market conditions temporarily improved in the first quarter following the provisional US-China tariff agreement, but vessel supply continued to increase as newbuildings were delivered, and freight market conditions in the second quarter declined from the same interim period of the previous year.」

「Container shipping: Although vessel supply continued to increase as newbuildings were delivered, robust cargo movements and tight supply-demand conditions caused by the situation in the Red Sea and port congestion supported strong market conditions through the third quarter. Market conditions were weak in the fourth quarter, but for the full year they exceeded the level of the previous fiscal year.」

「VLGCs (very large LPG carriers): Long-haul transportation from the United States to Asia increased, but market conditions fell far below the level of the same interim period of the previous year as vessel supply increased with the influx of newbuildings and the easing of the impact of low water levels in the Panama Canal. By contrast, time charter contracts had been renewed at charter rates reflecting the strong market conditions of the previous year, so charter revenue remained stable.」

「Containership segment: Through the third quarter, cargo demand remained weak due to higher interest rates and inflation, particularly in Europe and the United States, while vessel capacity increased as newbuildings were delivered, leaving market conditions subdued. In the fourth quarter, market conditions rose as supply and demand tightened due to the situation in the Red Sea, but for the full year they remained below the level of the previous consolidated fiscal year.」

「Containership segment: Cargo demand remained weak due to the effects of rising interest rates and inflation, particularly in Europe and the United States. Market conditions fell below the level of the same quarter of the previous year as vessel capacity also increased due to newbuilding deliveries and other factors.」

「Although summer is normally a season of strong demand, cargo demand remained weak due to the effects of growing inventories in North America and rising interest rates and inflation, particularly in Europe and the United States. Market conditions deteriorated year on year as vessel supply also increased due to newbuilding deliveries and other factors.」

「In the containership segment, at ONE, falling spot freight rates resulting from weak global cargo demand and the easing of port congestion affected contract renewals and reduced profit levels.」

「Containership supply and demand remained tight through the middle of the second quarter due to strong transportation demand and supply chain disruption caused by port congestion. From the summer onward, however, transportation demand declined due to a combination of factors, including growing inventories in North America and elsewhere and inflation, while vessel capacity increased as global port congestion eased, resulting in lower spot freight rates.」

「In the containership segment, on the demand side, transportation demand continued to decline due to a combination of factors, including growing inventories of consumer goods in end markets, particularly in Europe and the United States, and inflation. On the supply side, vessel capacity increased as global port congestion was alleviated in most areas, resulting in lower spot freight rates.」

「In the containership segment, transportation demand declined due to a combination of factors, including growing inventories of consumer goods in end markets, particularly in Europe and the United States, and inflation. Recent spot freight rates fell, but ONE maintained high freight rate levels throughout the first half and performance remained strong.」

「In the containership segment, at ONE, performance remained solid as freight market conditions stayed at high levels, despite the impact of supply chain disruption caused by port congestion, lockdowns in China, and the situation in Russia and Ukraine.」

「In the containership segment, supply and demand tightened because port congestion originating from the spread of COVID-19 and inland congestion caused by driver shortages and other factors were not alleviated, leaving disruption across the entire supply chain unresolved. In the dry bulk transportation segment, Capesize market conditions reached their highest level in 11 years. Although conditions declined after peaking in early October as vessel congestion in China eased, they remained far above the level of the same period of the previous year. In the energy transportation segment, the vessel supply-demand balance did not improve, and market conditions for VLCCs (very large crude carriers) and product tankers remained historically depressed.」

「In the containership segment, at ONE, strong cargo demand continued, particularly in North America, but supply and demand tightened as port congestion originating from the spread of COVID-19 and inland congestion caused by driver shortages and other factors were not alleviated, leaving disruption across the entire supply chain unresolved. In the dry bulk transportation segment, Capesize market conditions reached their highest level in 11 years. Although conditions declined after peaking in early October as vessel congestion in China eased, they remained far above the level of the same quarter of the previous year. In the energy transportation segment, although OPEC+ gradually reduced its coordinated production cuts from May onward, the supply-demand balance did not improve, and market conditions for VLCCs (very large crude carriers) and product tankers remained historically depressed.」

「In the energy transportation segment, although OPEC+ gradually reduced its coordinated production cuts from May onward, the supply-demand balance did not improve, and market conditions for VLCCs (very large crude carriers) and product tankers remained at historically depressed levels.」

「In the containership segment, at ONE, supply and demand tightened further as strong cargo demand continued while vessel and container turnaround times declined due to congestion at ports and inland locations.」

「From the second quarter onward, demand recovered more strongly than expected, and our performance remained strong, supported particularly by robust cargo volumes in the liner shipping, air transportation and logistics businesses.」

「In the third quarter, cargo volumes recovered sharply as demand for medical supplies and consumer goods driven by stay-at-home demand increased further. As vessel space and empty containers became scarce, congestion also emerged at ports and inland locations, tightening supply and demand.」

「In the energy transportation segment, energy demand declined due to the spread of COVID-19, and market conditions became highly unstable after major oil-producing countries agreed on coordinated production cuts in early April.」

「When market conditions finally recovered in June, Capesize rates recovered sharply, and Panamax rates also benefited. However, the preceding downturn kept market levels below those of the same quarter of the previous year.」

「In the dry bulk transportation segment, market conditions rose in the first half, driven by solid cargo volumes of iron ore, coal and grain, but remained weak in the fourth quarter as seasonal cargo volume declines coincided with deteriorating market sentiment due to the spread of COVID-19, making it a highly volatile year.」

「In the containership segment, Ocean Network Express Pte. Ltd. (ONE)'s overall liftings and load factors generally remained solid, with liftings increasing particularly on the major North American and European trades and within Asia. However, growth stalled in the third quarter due to seasonal demand weakness and the impact of U.S.-China trade tensions. In the first and second quarters, freight rates on the North American trade remained above the levels of the same quarters of the previous year, while rates on the European trade remained weak because the deterioration in the supply-demand balance prevented a summer peak. In the third quarter, rates on both the North American and European trades declined year on year. In the dry bulk transportation segment, market conditions deteriorated as cargo volumes of major commodities, including Brazilian iron ore, declined due to the early onset of the rainy season.」

「Freight rates on the North American trade remained above the level of the previous year, while rates on the European trade remained weak, as the deterioration in the supply-demand balance prevented a summer peak. In the dry bulk transportation segment, newbuilding deliveries exceeded scrapping, but the supply-demand balance tightened as more vessels, particularly Capesizes, entered dry dock ahead of environmental regulations taking effect in January 2020, and market conditions improved.」

「Freight rates remained strong in both North America and Europe compared with the same quarter of the previous year. In the dry bulk transportation segment, newbuilding deliveries exceeded vessel scrapping, so excess capacity was not eliminated. Iron ore cargo volumes showed signs of recovery, but the impact of supply disruptions in Brazil and Western Australia from January through March persisted. Coal and grain cargo volumes remained solid, but market levels were below those of the same quarter of the previous year.」

「In the containership segment, supply remained high, as in the previous year, but cargo volumes were solid and spot freight rates remained strong. In the dry bulk segment, the pace of vessel deliveries was steadily slowing. Cargo volumes of iron ore, coal and grain remained solid in the first half, but cargo volumes to China were sluggish in the second half, leaving market conditions broadly unchanged from the previous year on an annual average basis.」

「In the containership segment, supply remained high, as in the previous year, but cargo volumes were solid and spot freight rates remained strong, partly due to front-loaded demand ahead of concerns over higher U.S. tariffs on imports from China. In the dry bulk segment, the pace of vessel deliveries was steadily slowing, and although cargo volumes to China remained sluggish, a gradual market recovery continued.」

「In the dry bulk segment, vessel capacity increased as newbuilding deliveries exceeded scrapping, but market conditions improved, supported by solid cargo volumes of iron ore, coal and grain.」

「In the containership segment, demand was resilient, but vessel capacity increased due to deliveries of large newbuildings, causing the recovery in spot freight rates to stall somewhat. In the dry bulk segment, the pace of vessel deliveries was steadily slowing, while cargo volumes, including coal and grain, increased, and a gradual market recovery continued.」

「In the dry bulk segment, excess capacity has yet to be eliminated, but cargo volumes of iron ore, coal and grain all increased, and market conditions have continued to recover.」

「In the containership segment, supply remained high, as in the previous year, and the recovery in spot freight rates stalled somewhat, but cargo volumes remained solid, supported by strong freight demand. In the dry bulk segment, excess capacity had yet to be eliminated, but market conditions improved, supported by active cargo volumes, including increased Chinese iron ore imports.」

「In the containership segment, supply remained high, as in the previous year, but spot freight rates generally remained firm, supported by solid cargo volumes. In the dry bulk segment, excess capacity had yet to be eliminated, but market conditions improved, supported by active cargo volumes, partly due to increased Chinese iron ore imports.」

「In the containership segment, vessel capacity increased partly due to alliance restructuring, but spot freight rates generally remained firm, supported by solid cargo volumes. In the dry bulk segment, cargo volumes were active, but excess capacity remained a concern due to sluggish scrapping of older vessels and the delivery of newbuildings, limiting the pace of market recovery.」

「During the consolidated fiscal year, the shipping market fell to historic lows, having a significant impact throughout the year. In the containership segment, freight market conditions remained weak as excess vessel capacity persisted. In the dry bulk segment, the supply-demand gap was narrowing as vessel scrapping progressed and cargo volumes increased, but the depressed market did not improve significantly.」

「The environment surrounding the shipping industry has shown signs of recovery in spot freight rates during the period in the containership segment, partly because customers became more selective in choosing carriers following the management failure of a Korean shipping company at the end of August last year. However, the trend toward oversupply of vessel capacity caused by the successive delivery of large newbuilds, along with the resulting widening supply-demand gap, has continued, and a full-fledged recovery remains uncertain. In the dry bulk segment, where historically weak market conditions had persisted, market conditions have shown signs of improvement since the beginning of autumn, partly due to increased Chinese imports of coal and iron ore, but a full-fledged recovery is still expected to take time.」

「Net income attributable to owners of the parent declined by ¥286.5 billion year on year due to the recognition of approximately ¥200.0 billion in impairment losses and provisions for contract losses related to containerships, dry bulk carriers, and cargo aircraft. Revenue declined year on year, and profit declined sharply at every level, resulting in a loss.」

「In the containership segment, freight rate recovery failed to gain traction amid oversupply caused by the successive delivery of large newbuilds, and freight market conditions remained extremely weak. In the dry bulk segment, although scrapping of older vessels progressed, the supply-demand gap remained far from being substantially resolved, forcing the Group to operate under very challenging conditions. In the liquid cargo segment, supply and demand deteriorated markedly across all vessel types as newbuilds were delivered.」

「Ocean freight rates tend to fluctuate significantly because of imbalances in vessel supply and demand. If vessel supply exceeds demand, charter rates in the market may decline.」