Despite strong headwinds in the intra-European market, short-sea and feeder operator Seago Line, part of Maersk Group, closed its 2016 financial year with a profit of USD 75 million.
However, the company’s net results were considerably lower in 2016 when compared to the profit of nearly USD 140 million seen in 2015.
According to the company, 2016 turned out to be a difficult year due to marginal market growth, oversupply coming from increased capacity from existing competitors and from larger shipping companies entering the intra-European market, intensifying competition on prices.
“The main driver of Seago Line’s reduced result is a decrease in freight rates which has now made the rates reach an unsustainable level,” Seago Line said.
“In the last part of 2016, we saw signs of an improving supply-demand situation due to increased scrapings which is encouraging, but the market situation is still very challenging,” the shipping firm added.
When talking about its plans for 2017, Seago Line said it will continue its “digital transformation journey” in an effort to make shipping easy for its clients.
This will be supported by internal restructurings of several business areas and optimization of processes.
Towards the end of 2017, Seago Line plans to phase in the first of its new Ice Class vessels. The newbuildings will replace existing vessels and enhance service coverage to and from the Baltic Sea, the company said.
Seago Line operates a fleet of 62 vessels with a capacity ranging from 375 to 3,000 TEU.