Finland’s ESL Shipping says profit were eroded in the first quarter by unexpected technical problems and domestic port walk-outs.

The Baltic Sea bulker specialist said operating earnings to 31 March were €6m ($6.6m), down from €9.2m at the same point of 2022.

Revenue dropped to €52.7m from €56.8m last year.

The company, owned by industrial group Aspo, said the result can still be considered good, however.

“The anticipated unrest in Finland’s labour market materialised and the first quarter of 2023 was hampered by a stevedores’ overtime ban and a two-week strike in most Finnish ports,” it added.

As a result, ESL’s cargo volumes fell to 3.3m tonnes from 3.8m tonnes a year earlier.

Handysizes had stable volume demand from long-term industrial partners.

Coaster volumes suffered not only from the strike but also from severe capacity constraints due to limited availability of time charter tonnage and an unexpected 35 days of maintenance off-hire for two owned sister ships.

These dry-dockings were caused by the “inferior quality of machinery spare parts provided by their original equipment maker”, ESL said.

Tonnage providers continue to have unrealistic ideas of rates for ESL’s main market areas, the owner added, and this may cause further uncertainties in the availability and pricing of suitable and sufficient tonnage.

Supramax rates drop

For the company’s two largest supramaxes, spot cargo market activity and freight rate levels were significantly lower during the first quarter than a year earlier.

The sale of these non-core ships is being explored.

Operations were also hit by lower-than-expected demand for energy coal transport.

The group controls 42 ships, of which 23 are wholly owned, two are minority owned and the rest are chartered in.

“Opinions with regards to global demand estimates in sea transportation markets and price levels of spot markets are split,” said ESL.

After a slow start to the year, the market for larger tonnage has somewhat picked up since the reopening of China after Covid-19, although continental Europe, the Baltic Sea and Scandinavia still remain low-activity areas, it added.

But the availability of ships suitable for year-round operations in the Baltic Sea is limited, the owner said.