Japan’s two biggest shipping lines said Monday they will cut container services capacity after reversing profit forecasts for this fiscal year to net losses.
Mitsui O.S.K. Lines Ltd. said it will reduce frequency on container routes as it expects a net loss of ¥4 billion for the year ending March 31, compared with a previous prediction of a ¥17 billion profit.
Nippon Yusen K.K., or NYK, expects an ¥18 billion net loss, compared with an earlier estimate of ¥5 billion in net income.
The shipping lines are trimming container services capacity after a surge in supply of vessels pushed down rates. Global container-shipping trade fell 1 percent in August, normally the peak month for transporting boxes, from the prior month, the worst performance in at least 11 years, Macquarie Capital (Europe) Ltd. said.
NYK cited higher fuel prices, the strengthening yen and a reduction in demand for shipping caused by the floods in Thailand as weighing on earnings in addition to the ship glut.
Containerships with capacity to haul more than 1 million 20-foot (6.1-meter) boxes may need to be idled or laid up because of overcapacity in the industry, The Baltic and International Maritime Council, a shipping trade group, said in October.
Meanwhile, Kawasaki Kisen Kaisha Ltd., the nation’s third-largest shipping line, said Monday it expects a net loss of ¥32 billion in the year ending March 31, compared with an earlier loss forecast of ¥30 billion.
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