Wisdom seeks to counter lower shipping rates

  • By Kao Shih-ching / Staff Reporter

Bulk shipper Wisdom Marine Lines Co (慧洋海運) said yesterday that long-term contracts would help it mitigate the effects of lower shipping rates by the end of the year, after having announced record pretax earnings for the first eight months of the year.

The Baltic Dry Index (BDI), which tracks freight rates for all types of vessels, fell to 965 points at the end of last month from 1,895 points at the end of July. The index stood at 4,132 points a year earlier, the data showed.

“Even if shipping rates continue to drop this month or later this year, we should be able to grow our revenue steadily as at least half of our fleet is serving on long-term contracts. with fixed freight rates,” Wisdom said.

Photo: Bloomberg

Wisdom’s fleet consists mainly of small and medium-sized vessels, with practical-sized vessels accounting for around a third of the total.

Last month, the daily rate for a Supramax vessel averaged $17,881 and that of a practical-size vessel $16,240, both lower than the previous year, but still higher than of 2019, he said.

Wisdom had been optimistic about freight rates this year and expected demand for transport to outweigh supply.

He changed his mind yesterday, saying global inflation, droughts and China’s slowdown have reduced global demand for commodities and dragged down global trade, although these factors may not affect bulk shipping for long. , he added.

Wisdom reported a cumulative pre-tax profit of NT$8.77 billion (US$285.57 million) for the first eight months, topping its pre-tax profit of NT$8.26 billion for the entire year. year, with earnings per share of NT$11.75.

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