The container industry is a notoriously difficult sector to make any money in, but a few major lines have managed to avoid the red ink while others have toiled. Drewry Maritime Equity Research compares the performances of Asian companies OOIL and NOL for clues behind the varying results and the future direction that the most successful are likely to head.
The last five years have been a stormy period for the global container shipping industry and have affected all big and small players alike. The industry’s boom period of 2003-2008 saw low debt, ample liquidity and healthy balance sheets. That now seems a distant memory as the last few years and in particular 2011-13 saw the industry’s profitability suffer negative cash flows straining industry balance sheets and debt-to-equity ratios spiraling out of control.
Drewry estimates that the industry has collectively made an operating loss of around $2.5 billion in the past three years with the last couple only providing a tiny profit. The outlook for 2014 is not much better. Within those aggregate results are considerable gaps between the best and worst performing lines.
