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MOL sees profits crash as ONE begins its recovery

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Mitsui O.S.K Lines (MOL) saw its profits fall by 47.5% in the first quarter of the financial year 2020 as the COVID-19 pandemic continues to hurt operations and trade.

The Japanese carrier, one-third of shipping alliance Ocean Network Express (ONE), also suffered a decline in revenue of 11.2%, even though the alliance as a whole turned a profit.

In a statement, MOL said ONE as a whole had seen “considerable deterioration” in traffic compared to the same period in 2019, due largely to the decline in trade caused by the COVID-19 pandemic.

The carrier also said it had struggled with weak freight rates at the beginning of April. However, rates stabilised at the end of April as China’s exports began to recover.

“In this business environment,” MOL said, “profitability was achieved in this first quarter because ONE promoted cost reductions while minimising the fall in capacity utilisation rates through the additional reduction of services in both the Asia-North America and the Asia-Europe routes and also benefited from falling fuel prices.”

The COVID-19 pandemic has caused chaos across the industry and trade disruption in ports across the world. In addition to other preparations, MOL said it would cut the number of employees working from the office from 50% to 30%, effective immediately.

MOL will continue to give top priority and to ensure the safety of its officers, employees and related parties, and will respond flexibly in accordance with the Government Policies, the company said.

ONE, an alliance founded following the overcapacity crisis, a consequence of the financial crash of 2008, appears to be past the worst of it, but it is had yet to issue guidance for the full financial year, due to end on 31 March 2021.

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