JAPAN’S two largest shipping lines, Nippon Yusen K.K. (NYK Line) and Kawasaki Kisen Kaisha (K Line) both reported multi-million dollar losses for the first nine months of the fiscal year beginning April 1, 2016, as global uncertainties continue to weigh on demand for shipping.
NYK Line posted consolidated revenues of $12.48 billion, down from $15.68 billion in the same period of the previous fiscal year, with an operating loss of $136.8 million. K Line reported operating revenues for the nine-month period were $6.71 billion, down $1.91 billion year-on-year, with operating losses reaching $306.06 million.
Both carriers cited similar reasons for the losses, chief among them a strong yen, which dampened demand for Japanese exports. The persistent oversupply of shipping capacity was also identified as a reason for lower revenues, as was overall economic uncertainty caused by the UK’s decision to leave the European Union, and the election of Donald Trump as president in the US.
Although industry analysts have consistently said that freight rates will not fully recover until at least next year, both shipping giants sounded a cautiously optimistic note in their separate disclosures, noting that spot freight rates have improved since the bankruptcy of Korean shipping line Hanjin at the end of August 2016, and a moderate depreciation of the yen in the wake of Trump’s election victory.
In mid-October 2016, NYK Line and K Line announced that they had reached a three-way agreement with Mitsui O.S.K. Lines (MOL) to merge the three companies’ container shipping operations. However, that merger has been stalled by a lengthy review by regulators.