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Hard for Asia-Europe trade to support large boxships

Hard for Asia-Europe trade to support large boxships
New York: Weak volumes on the Far East-Europe trade would have difficulty supporting an inflow of large containerships while demand on the transpacific lane has improved from a recovering US economy, according to John Coustas, ceo of Danaos Corporation.

Coustas noted that the “fundamentals of the containership market still remain weak” in the Far East-Europe trade as evidenced by lower freight rates compared to one year ago.

“Non-mainlane trade growth remains healthy and helps absorb capacity that is cascaded down from the mainlane routes but this adds pressure to the charter market, particularly on the mid-size containerships,” he said.

Despite the challenging container market environment, Danaos has managed to register higher first quarter net profit of $13.43m compared to $9.34m a year earlier.

Revenue rose 8.9% year-on-year to $146.09m.

In the three months ended 31 March 2013, Danaos had an average of 63.1 containerships. Out of seven vessels laid-up last year, only one was left at the end of the first quarter.

“During this quarter, we re-activated one vessel, while we sold four of our older vessels and we intend to use the sale proceeds to make accretive acquisitions of younger containerships,” Coustas said.

TAGS: Containers