Two of Japan’s largest shipping lines, NYK Line and K Line have both suffered multi-million dollar losses in the first nine months of the fiscal year beginning April 1, 2016.
NYK Line posted consolidated revenues of US$12.48 billion, down from $15.68 billion in the same period of the previous fiscal year and an operating loss of $136.8 million, while K Line reported operating revenues for the nine-month period were $6.71 billion, down $1.91 billion year on year, and an operating loss was $306.06 million.
Citing uncertainty in the global economy, caused by the UK’s decision to leave the EU and the election of Donald Trump as US President, demand for shipping was dampened. However, much of the loss was caused by an unusually strong yen hampering the attractiveness of Japanese exports to overseas buyers.
Conditions could yet improve for the remainder of the fiscal year though, as the yen has depreciated moderately since the victory of Donald Trump and spot freight rates have improved as customers become more selective about shipping lines following the bankruptcy of the Korean shipping line Hanjin, around the end of August 2016.
On the other hand, the gap between supply and demand continued to widen as the steady production of new ultra-large container ships contributed to an oversupply of tonnage. Consequently, the market is not projected to fully recover in the near future.