Zhonggu Logistics, China’s largest domestic liner operator, said that 2021 first half net profit rocketed 343% year-on-year to US$170.43 million as tight shipping capacity continued to put upward pressure on freight rates.
Revenue went up 26% to US$867.49 million, of which inland water transportation contributed 80%; the rest came from land-based services.
Zhonggu, the 16th largest liner operator, stated that cargo volumes were up 9% in 1H 2021, to 6.2 million TEU.
During the first six months of the year, Zhonggu took delivery of a newbuilding, the 1,140TEU Han Hai 8 Hao, from WUT Guangda, taking its owned fleet to 61% of its total operating capacity of 138,916TEU.
The company said that the proportion of direct customers, referring to major manufacturers and consumer goods suppliers, increased from 28% in H1 2020 to 32% in H1 2021.
A trend of increasing containerisation, as cargoes that were usually shipped as breakbulk or general cargoes are gradually moved in containers, is expected to augur well for Zhonggu’s future earnings.
Besides shipping, Zhonggu’s management disclosed that the red-hot container shipping market has brought an additional revenue stream, as the company generated charter income by letting out its vessels to mainline operators such as CMA CGM and MSC.
As a result, in H1 2021, Zhonggu’s inland shipping capacity contracted by 20%.
Zhonggu itself has expanded beyond its remit of inland shipping, having launched a Shanghai-Ningbo-Ho Chi Minh-Shanghai service in March. The potential of overseas routes convinced the company to order 18 ships of 4,600TEU capacity from China Merchants Jinling Shipyard (Nanjing) Co., Ltd and Yangzijiang Shipbuilding.
Martina Li
Asia Correspondent
