ZIM’s net loss for the first quarter of 2018 deepened to $34.1 million from a net loss of $6.4 million for the 2017 first quarter, the Israeli ocean carrier said Thursday.
ZIM was one of several ocean carriers to report less-profitable results for the quarter from a year prior as spot rates have been deteriorating.
The Shanghai Containerized Freight Index, for instance, which measures spot rates from Shanghai to 13 regions around the world, had a composite reading of 753.83 this past Friday, down from a reading of 830.80 a year earlier.
“The container shipping industry is dynamic and volatile and has been marked in recent years by instability, due to ongoing changes in market conditions,” ZIM said. “Since the second half of 2016 and through the third quarter of 2017, increases were recorded in freight rates as well as in bunker prices. Commencing in the fourth quarter of 2017 and during Q1 2018, freight rates have decreased while bunker prices continued to increase.”
ZIM’s average freight rate per TEU during the quarter slipped 1.6 percent year-over-year to $938.
On a bright note, ZIM managed to increase revenues and volumes during the quarter from a year prior, with revenues rising 14.7 percent to $751.4 million amid a 16.7 percent surge in volumes to 698,000 TEUs.
ZIM President and CEO Eli Glickman said, “While we started to see an improvement in some of the trade towards the end of the quarter, Q1 2018 results, on the whole, were negatively impacted by the combined effect of increased bunker prices, higher charter costs and lower freight rates.”
Looking ahead, he said that ZIM keeps investing in digital solutions to enhance efficiency and customer experience and remains focused on achieving its goals as an independent carrier.
Established in 1945, ZIM operates about 85 vessels and has around 4,200 employees. Financial institutions and shipowners own 68 percent of ZIM’s shares, with Kenon Ltd. owning the remaining 32 percent.