Japan's NYK may reduce its container services from Asia to the United States by an additional 15 percent as it struggles with the money-losing unit amid declining trade worldwide.
The largest Japanese carrier, which cut its container-shipping service with the U.S. by 10 percent in October, wants to widen reductions as soon as possible, Mikitoshi Kai, NYK’s head of investor relations, told Bloomberg News.
“I don’t think we’ll be able to make a profit next fiscal year on the container business,” he said. “We’re trying not to sink.”
The Grand Alliance, which includes NYK, Hapag-Lloyd, MISC Berhad and Orient Overseas Container Line, already decided to reduce its European container service by 20 percent, Kai said.
In January NYK cut its net income forecast to 73 billion yen ($778 million) for the year ending March 31, or 48 percent lower than its previous prediction. It forecast a pretax loss of 19 billion yen at its container shipping business in the period, compared with a profit of 11.5 billion yen last fiscal year.
Container shipments from Asia to the U.S. fell a record 13.3 percent to 1.03 million boxes in November, according to the Japan Maritime Center. The drop is the largest since the center began compiling figures in 1995.
The Journal Of Commerce Online
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