MOL: No container profitability through 2011

MOL: No container profitability through 2011    MOL Executive Vice President Masakazu Yakushiji said last week he expects the Japanese carrier's container division to continue losing money through the financial year ending March 2011.
   In an interview with Bloomberg in Tokyo, Yakushiji said rates will be too low, and oversupply too severe, to project a profit for the line next year. MOL has been able to raise rates on the Asia/Europe trade by about $200 per TEU, but that's not nearly enough to allow it to return to profitability, he said.
   The shipping line is focusing on markets with more potential, such as in South America. Additionally, it has been among the most active scrappers of tonnage, reducing its fleet from 115 to 98 ships, he said. About one-third of MOL's revenue comes from the carrier's container shipping business, with Yakushiji saying the line has a goal of returning to profitability within three years.
   He ruled out any more wide-scale scrapping, but said the company may look to move administrative functions to countries with lower pay scales, among other cost-cutting measures.
   According to the Bloomberg report, the container division will lose $435 million in the current fiscal year, though MOL as a whole will turn a profit, thanks to bumper demand for its bulk shipping services from China.