Posted by Glaceau > 2021-07-19 23:28 | Report Abuse

Container shipping thrives amid pandemic Dry bulk shipping is not the sole bright spot. Tasco Bhd deputy group CEO Tan Kim Yong shares Ling’s sentiment. He says the cost of container freight has more than quadrupled from 2020 as current market demand outstrips supply and because of a shortage of containers, owing to congestion in Europe and the US, and, recently, China’s Yantian port backlog. The average price worldwide to ship a 40ft container (FEU) has more than quadrupled from a year ago, to US$8,399 as at July 1, according to London-based Drewry Shipping Consultants Ltd. “Container freight rates are at historical highs. In January, spot freight rates were US$4,000 per FEU and are now at US$6,000. This time last year, the rates were US$1,500. Ocean freight rates from Asia to Europe and the US have risen the most, but rates for intra-Asia routes have gone up as well,” Tan says. He notes that the rates started edging upwards from 3Q2020, owing to imbalanced container trade, with full containers entering the US and Europe but returning empty to China, whose economy has recovered faster from the pandemic than any other big economy. Tan expects container freight rates to remain high this year as demand continues to outstrip capacity, benefiting both liner operators and non-vessel-owning common carriers such as Tasco. Tasco, which derives about 40% of its revenue from its airfreight and ocean freight forwarding divisions, saw net profit grow 364% to RM41.27 million year on year for the financial year ended March 31, 2021 (FY2021), while revenue rose 27% y-o-y to RM946.61 million in that period. Tasco expects to continue its growth for this financial year, targeting a revenue of RM1 billion. The investment tax allowance granted through the Malaysian Investment Development Authority will further uplift its profit, says Tan.