Japan’s Ocean Network Express (ONE) logged another record quarter on the back of “significantly higher” freight rates.

Net profit rose to $5.5bn for the period from April to June, some 15% higher than $2.94bn in the same period last year.

Revenues rose 56% to $9bn, up from $5.7bn in the previous corresponding quarter.

Freight rates were firm despite some softening of supply-demand conditions, the Singapore-based company said.

But supply chain disruptions continued around the world, including deterioration on the east coast of North America, the company said.

The latest quarter continues a fine streak for the world’s sixth largest liner operator, which bagged a profit of $16.75bn for the financial year to the end of March.

However, chief executive Jeremy Nixon remains reluctant to prognosticate future results given the uncertainty in current markets.

The company expects that the excessive strain on the supply chain will eventually be resolved and the situation will gradually move toward normalisation.

“However, is currently difficult to predict exactly when due to the wide range of effects,” the company noted.

“It has become more difficult to forecast the overall business environment in the face of increasing uncertainties such as the ongoing Russia/Ukraine crisis, the impact of China’s zero Covid, and ongoing labour negotiations in the United States,” the company said.

“It is therefore extremely difficult to announce a reasonable business forecast for the current financial year and as such the company’s forecasts for Financial Year 2022 are yet to be finalised.”

Global uncertainty

Nixon pointed out that is was unclear how container volumes would be affected by global events.

But so far, the uncertainty had so far not been reflected in overall ONE first half liftings.

“Overall freight rates continue to be significantly higher than last year,” he said.

“However, we continue to face higher operational costs, driven by port and inland congestion and global inflation.”

Labour unrest is contributing to port congestion, forcing the company to adapt its operations.

“We have increased vessel speeds to maintain schedules, which has increased fuel consumption. We have also seen rising agency and IT expenses as well as increasing taxes,” he said.

Nixon flagged up the continued threat of restrictions from possible lockdowns in Shanghai.

He also warned of the impact of labour negotiations on the US West Coast between port workers and employers.

“We have seen cargo shifting between East and West coasts, possibly driven by shippers’ expectations of the potential for worsening port conditions on the West Coast,” he said.