NOL hit by falling container rates and rising costs

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Falling container rates and higher fuel costs meant that Neptune Orient Lines (NOL) posted a net loss of US$67 million (£42m) for the first half of 2011 compared to $1m (£620,000) profit in the same period a year ago.

Sales were up nine per cent to $4.6bn (£2.8bn) in the first half.

APL, NOL’s liner shipping business, reported  a seven per cent rise in revenue to  $4bn (£2.5bn) in the first half.  Traffic volume increased eight per cent but revenue per FEU declined three per cent, mainly due to lower freight rates in the Asia-Europe Trade. 

“Rate pressure, coupled with a 23 per cent year-on-year fuel price increase in the first half of 2011, negated the benefit of higher volume,” said APL president Kenneth Glenn.  “Our job now is to accelerate revenue growth while managing down costs in every aspect of our business; from terminal operations to the way we procure all other services.”

APL Logistics, the supply chain management business, increased sales 18 per cent in the first halto $682m (£423m).  Core EBIT rose 22 per cent from 2010 to $33m (£20.4m). 

The group said the increases were mainly due to gains in contract logistics, which includes rail and land transport business as well as auto logistics, and international services. 

“Increased volume in most of our business lines is driving revenue higher,” said APL Logistics president Jim McAdam.  “We are encouraged by the increasing contribution of emerging markets, particularly in China, to our first-half performance.”

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