Revenue rises fail to keep pace with costs at NOL
The woes facing the container shipping market due to rising fuel costs and tough competition have been illustrated by the first-quarter results from Neptune Orient Lines (NOL).
NOL is currently slashing costs in an effort to save around $500million over the whole of 2012. But revenue at its container-shipping unit, APL, fell by four per cent between January and March, which was equivalent to a fall of seven per cent per forty-foot equivalent unit (FEU) carried.
Despite this, first-quarter revenue was up by seven per cent, much of which was due to strong demand from motor industry customers for both land and rail services.
And while shipping rates have begun to rise, it has not been enough to offset the rising cost of fuel, according to APL president Kenneth Glenn, who also warned that cost-cutting would continue. "Much more remains to be done to increase rates and manage down expenses," he said.
NOL Group chairman Ng Yat Chung warned that the company would continue to "aggressively manage operating costs, and streamline our organisation for greater efficiency" over the rest of 2012.
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