Profits at Regional Container Lines fell by one-third in the first quarter.

Figures released on Wednesday showed that Thailand’s largest container line achieved net income of THB 613m ($16.7m) versus THB 912m a year earlier.

This was attributed primarily to a decline in freight income of THB 53m as the liner market adjusted to the post-pandemic environment.

RCL said freight rates increased by just 2% from the fourth quarter of 2023 to $314 per teu. The total number of containers carried increased to 604,000 teu.

“The container shipping industry had been positively impacted by the continuous effects of the Covid-19 situation from 2022 until the second quarter of 2023, enabling the … sector to generate extraordinary profits during that period,” it said.

“In the first quarter of 2024, the container shipping market encountered several challenges both in supply and demand aspects that impacted freight rates, shipping durations and overall market uncertainty.”

These include the global economic slowdown, which has led to the decrease in consumer demand and shipping volumes.

“Despite this, there has been an increase in newly built vessels entering the container shipping market,” it added.

“However, geopolitical tensions, particularly the situation in the Red Sea, have led to these new vessels being diverted to longer routes, resulting in longer shipping durations and increased freight rates.”

RCL owns and operates 42 vessels ranging between 388 teu and 11,714 teu and has several on order.

It recently ordered two more 4,400-teu container ships at China’s CSSC Huangpu Wenchong Shipbuilding at a cost of $56.6m each, taking its tally at the yard to six ships.

Deliveries are set for 2027, when the vessels will replace ageing ships within RCL’s fleet, offering fuel savings of up to 40%.

The company also confirmed that two recently delivered 7,000-teu newbuildings, built at a total cost of $170m, had been deployed on three-year charters, but it did not disclose the name of the counterparty.

TradeWinds reported last month that Singapore’s Pacific International Lines was behind the charters for both ships.

In 2023, RCL secured three long-term loans worth a total of $201.5m to fund its extensive newbuilding programme.