South Korea's three major shipping companies are all losing money in the first quarter

Abstract: according to statistics, Hanjin, Hyundai merchant shipping and STX, the three largest shipping companies in South Korea, all suffered losses in the first quarter of this year, mainly due to excess transport capacity and the increase in crude oil costs.

Hanjin Shipping, Hyundai merchant shipping and STX Pan Ocean, the three largest enterprises in South Korea's maritime industry, all suffered losses to varying degrees in the first quarter of this year.

In its first quarter financial statements released on May 13, Hanjin Shipping said that although its total sales increased by 14.4% compared with the same period last year to 2203.7 billion won, its operating income still suffered a loss of 11.6 billion won. The first quarter operating losses of Hyundai merchant shipping and STX Pan Ocean were 24.1 billion won and 41.6 billion won respectively.

The shipping industry is closely related to the prosperity of the world economy, and the logistics volume of raw materials and import and export goods is directly related to business performance. Although the world economy did not show a recession in the first quarter, the major shipping companies still suffered losses.

First of all, the main reason for the loss is the decrease of freight rate caused by the surplus of ships. As early as 2007-2008, the operation of the shipping industry was in good condition, and all the major shipping enterprises ordered a considerable number of cargo ships from the shipyards in South Korea and China. Today, 2-3 years later, ships built according to orders are gradually put into the market, resulting in the rapid expansion of the fleet of major shipping companies.

Alfa liner, a French maritime industry consulting company, has made statistics. In April this year alone, 32 large container ships have been put on the market, which is unprecedented.

Another market research company has made statistics and forecast on the transport capacity and demand of bulk carriers this year. It is estimated that the transportation capacity of global bulk carriers will increase by 13% compared with that of last year. However, the transportation demand of iron ore, coking coal and grain, which require bulk carriers, may only increase by 5%. When the capacity exceeds the demand, the result is a drop in freight.

Crude oil prices, which have risen sharply since the beginning of this year, are another reason. The average price of marine C heavy oil last year was 465 US dollars / ton. However, the average price in the first quarter of this year has risen to 600 US dollars / ton, up 30%. Therefore, the proportion of fuel cost in operating revenue has increased from 20% to 23% - 28%, which has caused a huge burden to the major shipping enterprises.

However, the South Korean maritime industry is still optimistic about the future development. A person in charge of the Korea Maritime Association said that the world economy led by the United States has begun to recover. The prosperity of the shipping industry lags behind that of the world economy, and the loss situation will gradually improve.