“The alliances just provide scope for shipping lines for to operate assets to together while they compete on sales. Whether alliances will improve rates I don’t think so,” Chung, ceo of NOL, said at a briefing for its annual results.
“The biggest driver of freight rates in the industry is a better is a better balance between demand growth and supply growth.”
Ng also sees alliances as a form of consolidatio,n but said, “I wouldn’t hold my breath for equity consolidation.”
NOL reported a full year loss of $76m for 2013 down from a loss of $412m in 2012. The company’s results were boosted by a non-recurring $200m gain from the completed sale of its headquarter building in Singapore, and efficiency savings. Despite this NOL’s loss widened in the fourth quarter with it reporting a net loss of $137m, compared to $91m a year earlier.
“Our revenue was hard hit by a drastic drop in freight rates. We had also experienced one of the weakest third and fourth quarters in recent years,” said APL president Kenneth Glenn. APL’s liner business accounts for over 70% of NOL’s business.