Hanjin Shipping has announced an operating loss for the second quarter of 2011 of US$254 million from a net profit of $191.04 million a year ago.
For the container division, South Korea’s biggest container carrier suffered an operating loss of $157 million despite the strong growth in cargo transport volume, which went up 13.2 percent up year-on-year and 14.3 percent quarter-on-quarter.
Increased fuel and logistics costs and the delayed recovery in freight rates on the trans-Pacific and Asia-Europe trades were the main reasons cited for the profit deterioration.
The bulk division recorded an operating loss of $138,000 because of the continuing market fall.
“Due to comparatively larger exposure to the Asia-Europe trade, of which freight rates were most affected by the deployment of mega-sized vessels, the quarter- on-quarter operating loss for the container division also showed larger results,” Hanjin said in a news release.
It plans to improve the performance of its container business by suspending loss-making routes, reorganizing calling ports and rotations, and restructuring deployed vessels.
For the third quarter, Hanjin expects container volume to rise in line with the approaching peak season, and its profitability to improve as shipping carriers try to recover freight rates and reduce costs.
For the bulk business, the carrier regards as positive market factors the settlement in the Australian coal supply, increasing demand for raw materials in the Chinese housing market, and the ongoing national reconstruction in Japan.
