Activity fell in Malaysia and Taiwan, a sign the U.S.-China trade conflict's impact on the rest of Asia was broadening.
KUALA LUMPUR: Westports Holdings Bhd
recorded lower container volume in April to May 2017 than originally expected due to the intense competition.
It said on Thursday it handled 3.95 million twenty-foot-equivalent units (TEUs) in the January-May period, which was down 3% from a year ago.
The corresponding quarter last year was a record quarter and the fastest growing period for the port operator in 2016, it said in its update on its container volume achieved for the five months ended May 31, 2017.
It said the statement was to ensure fair disclosure and thorough public dissemination to all shareholders and stakeholders as in accordance to international best practices and Bursa Malaysia Securities Berhad Main Market Listing Requirements.
In the first quarter ended March 31, 2017, it achieved 1% growth in container volume to 2.4 million TEUs.
“In the same quarterly financial report, we had indicated in the 'Current Year's Prospects' that we target to maintain similar container throughput as that achieved in 2016.
“We would like to disclose that for the month of April 2017 to May 2017, we have recorded lower volume than originally expected,” it added.
Westports had originally expected to still grow its volume this quarter due to an increased amount of transitional moves or ad hoc calls as a result of the changes in shipping alliances.
“However, these did not materialise as planned due to the fact that competition for these volumes were intense,” it added.
Westports said the realignment of the container shipping industry from April 1, 2017 saw the phasing-out of previous services under the Ocean 3 Alliance (O3), CKYHE and G6 and the gradual phasing-in of services under the new Ocean Alliance and THE Alliance.
The first vessel call at Westports under the Ocean Alliance was on April 6, 2017.
Under O3, its services were more spread out across the regions. In Ocean Alliance and THE Alliance, most of the 12 services that would be calling at Westports are more eastbound-focused services than westbound services.
The vessels for these services will need to sail from the East, such as China, towards their final destinations in the West, such as Europe, and then back to the East again and they will call at Westports only on the backhaul segment of their voyage.
“Due to the number of weeks sailing from the East to the West and then only back to the East, Westports terminal would only handle some of these vessels’ container requirements in the latter part of May or even June 2017.
“With the more moderate container throughput, we now expect the year’s overall container volume to be lower than the previous year by a single-digit percentage,” it said.
Westports also highlighted the container volume mix is more favourable as there is stronger growth momentum of higher yielding laden gateway boxes.
The overall container terminal utilisation has now shifted to more optimum levels that would facilitate Westports’ focus on enhancing its service quality levels, improved efficiency and also productivity levels.
It added the capacity expansion at container terminal (CT) 8 Phase 2 and CT 9 Phase 1 would also accommodate the resumption of volume growth after the current recalibration process within the container shipping industry.
Westports also said it would disclose the overall container volume for the six-month period ending June 30, 2017 when the Quarterly Financial Report for the second quarter is announced by the end of July 2017.
