Trade War Threatens Container Volume Growth, HPH Trust Says

Image Courtesy: HIT

Uncertainties and downsize risks arising from protectionist US trade policies and geopolitical tensions could affect trade volume growth seen in Q1 2018, Hutchison Port Holdings Trust believes.

Singapore-based container port business trust HPH Trust said 2018 is set to be a transformative year for the global shipping lines industry due to shifting economic trends and trade flows in conjunction with the consolidation of ownership.

In addition, investment in modernization and expansion of port facilities is expected to continue to drive overall efficiencies and competitiveness.

“Shipping lines will continue to deploy mega-vessels to attain capacity and fleet optimisation to drive further cost efficiencies. In addition, focus has shifted from port performance to supply chain performance to enhance competitiveness and operational efficiencies. Furthermore, greater emphasis will be placed on security in the wake of growing cyber-attack threats on companies,” HPH Trust said referring to the events that may impact the company’s performance in the next twelve months.

The container shipping outlook was presented in HPH Trust’s Q1 2018 financial results which show the company wrapped up the quarter with improved earnings and throughput.

Specifically, the company’s overall profit increased by 12.1 percent to HKD 421.3 million (around USD 53.7 million) in the first quarter of 2018 from HKD 375.9 million in the corresponding period a year earlier. Revenue and other income for the three-month period between January and March 2018 stood at HKD 2.7 billion, an increase of 3.5 percent when compared to the same quarter last year.

What is more, container throughput at HPH Trust’s ports was up by 5 percent in the first quarter of this year when compared to Q1 2017.

Combined container throughput of Hongkong International Terminals (HIT), COSCO-HIT Terminals (COSCO-HIT) and Asia Container Terminals (ACT) — collectively HPHT Kwai Tsing — was 1 percent above last year, mainly due to the increase in transshipment cargoes.

Additionally, container throughput of Yantian International Container Terminals (YICT) rose by 8.7 percent when compared to the same quarter in 2017, primarily driven by the growth in empty and transshipment cargoes.

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