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OOIL warns of operational challenges despite record profits

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Orient Overseas International Limited (OOIL) made profits of approximately $2.8 billion in 1H 2021, the best six-month results in its history, an increase from the $102 million during the same period in 2020, which it attributed to the easing of lockdown measures eased in many of its largest markets.

In a statement accompanying its financial results, the Hong Kong-based carrier said it has seen clear signs of reopening and economic recovery from the middle of last 2020.

Demand in “key importing economies” has been “considerably stronger than forecast”, especially on Trans-Pacific routes, it said.

“We have worked hard to inject additional capacity into key routes on our network in order to provide further space for customers, and we continue to do so,” OOIL explained.

However, it warned that the global supply chain is under severe pressure as a result of a long list of “operational challenges”, such as the obstruction of the Suez Canal, insufficient rail capacity, empty box shortages, strained yard capacity and quarantine measures for seafarers.

“Despite our efforts to increase capacity, supply and demand have been in severe imbalance as a result of both stronger-than-expected demand and also the numerous operational challenges.

“These market forces have put upward pressure on freight rates on most tradelanes, and it is these market forces, in addition to our usual careful attention to cost control, that have driven the strong profitability that has been achieved during the period.”

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