Stolt-Nielsen says parcel tanker market ‘challenging’

Demand for tank containers is up, but revenue per shipment has decreased due to competition.    The parcel tanker operator Stolt-Nielsen said that the markets for its industry were challenging during the first half of 2014.
   “Although both spot and contract rates showed moderate improvement since 2013, lower spot volumes and increased port delays caused utilization to be below the same period last year. As a result, the improving trend in operating profit which we saw during the second half of 2013 has not carried on into the first half of 2014,” it said.
   The company said “continued presence of non-ship owning operators and cash-strapped owners willing to accept low rates hinders a more substantial rate recovery.” And it cautioned that orders for new parcel tankers have grown rapidly over the last five months, with private equity and equity hedge funds supporting newbuilding orders.
   “Although most of the deliveries are planned from 2016 onward, the increase on the supply-side may temper future rate increases,” it said. “For the next couple of years, a lack of newbuilding orders for large stainless tonnage is anticipated to result in an improved market as the current supply overhang is absorbed. The slow recovery in the global economy has also affected the recovery of the parcel tanker market.”
   Stolt Nielsen — which has divisions that are involved in tank containers, tank terminals and aquaculture — reported a profit of $49.8 million in the first half of its fiscal year, ending May 31, compared to $25.7 million a year earlier. Revenue was $1.06 billion in the first half compared to $1.05 billion the year before.
   In the tank container business, Stolt said it saw “improved demand for its services during the first half of 2014, compared with the same period in 2013. During this period, the size of the fleet grew by 3.5 percent as a result of the delivery of new tank containers in 2013 and into 2014.”
   Revenue per shipment decreased due to increased competition. Utilization was 75.3 percent for the first six months of 2014, up from 73.5 percent for the same period in 2013.
   It said demand for tank containers is expected to increase in most major markets worldwide; it recently ordered new containers forrdelivery between June 2014 and May 2015.