Japan's start-up Ocean Network Express (ONE) container line is expecting a much wider loss for its first six months due to "teething troubles".
The company, founded by NYK, K Line and MOL, has revised its net deficit prediction from $38m in July to $310m for the period to 30 September.
Revenue is now expected to be $5.44bn, against $5.03bn back in the summer.
For the full year to 31 March, it predicts a loss of $600m, against a previous forecast of a profit of $110m.
Revenue for the 12 months will be around $11bn, according to K Line, whereas it had earlier expected it to be $12.25bn.
K Line said that while cost savings had emerged, liftings and utilisation dropped due to the impact of teething problems immediately after the commencement of services in April of this year.
IT troubles
Some of these problems related to booking reception and documentation operations being delayed because ONE staff were not completely familiarised with the newly introduced IT system, and the staff were shorthanded.
This caused significant inconvenience for customers. Issues such as staff skill levels and personnel shortages have already been addressed, and their operations have returned to normal, the company said.
"ONE sought to regain lost ground during the peak season from July to September, but liftings and utilisation remained lower than the outlook because the negative impact remained on its main Asia-North America routes and Intra-Asia routes," it added.
There were additional negative effects from the higher cost of returning containers brought on by decreased liftings on backhaul voyages from North America to Asia and Europe to Asia. Bunker prices also rose.
"The teething problems regarding ONE’s services have already been resolved, and both ONE Holdings and ONE are working earnestly to restore the trust of customers and further improve service quality," it said.
"However, liftings and utilisation are still on the way to recovery, and the target for additional cost reduction to address increased bunker prices, is expected to be lower than the target in the previously announced forecast."
Owners downgrade forecasts
As a result, K Line has revised its own forecasts made in July.
For the six-month period to 30 September, it said the result was a loss of JYP 26.5bn ($236.5m), against its prediction of JPY 15bn previously.
And for the full year, the loss could be JPY 21.5bn, as opposed to a profit of JPY 7bn.
MOL said its full-year result will now be a JPY 5bn profit, down from JPY 8bn previously.
NYK has left its July forecasts unchanged.
