Neptune Orient Lines (NOL) plans to cut US$500m from its operating budget and raise freight rates after posting its biggest quarterly loss in a decade.
According to a report by Bloomberg, cuts will come in the form of reduced fuel consumption, improved fuel pricing and more efficient network design.
NOL subsidiary APL, South East Asia’s largest container line, expects to benefit from higher rates on Asia-Europe and trans-Pacific routes, as shipping lines ease back on cutthroat pricing. The company will also cooperate with other carriers on the Asia-Europe route, Bloomberg reported, while Maersk will also cut capacity on the route.
APL president Kenneth Glenn told the news source the unit was filling more than 90 per cent of capacity on Asia-Europe routes and was pushing for higher rates. The shipping line was looking to raise rates by US$750 to US$800 per 20-ft box, as of next month. According to Bloomberg this would about double spot rates.
APL is also among 15 lines looking to raise rates by US$300 per 40-ft box on Asia-US routes.
The spot price of moving containers to Europe and the US had increased 45 per cent since a 12-month low in December of last year, based on weekly indexes compiled by the Shanghai Shipping Exchange.