Ocean Network Express (ONE) Bounces Back with Q4 Profit Amid Middle East Tensions, Eyes Billion-Dollar FY2024 Profit
Amid geopolitical tensions in the Middle East, Ocean Network Express (ONE) experienced a surge in freight rates during Q4 FY2023, leading to a profitable quarter and optimistic forecasts for FY2024. The shipping giant reported a Q4 profit of $356 million for the period spanning January 1st to March 31st, 2024, marking a significant turnaround from the $83 million loss in the previous quarter. This positive momentum resulted in a full-year profit of $974 million for FY2023.
Despite the Q4 upturn, FY2023 profit remained 94% lower than FY2022, which was fueled by pandemic-induced supply chain disruptions and record container freight rates. However, the rerouting of shipments via the Cape of Good Hope reversed the demand-supply imbalance, leading to a substantial increase in short-term freight rates in Q4 FY2023.
Looking ahead to FY2024, ONE anticipates a slight improvement in profit, aiming for around $1 billion. However, the influx of new vessel deliveries is expected to cause an ongoing surplus in supply compared to cargo demand. Moreover, the continued routing via the Cape of Good Hope, driven by uncertainties in the Middle East, is projected to significantly impact the supply-demand balance in the first half of the fiscal year, driving up demand for vessel capacity.
Jeremy Nixon, CEO of Ocean Network Express, emphasized the company’s commitment to monitoring the situation closely and maximizing profit through flexible tonnage deployment and efficient equipment control based on demand amidst the evolving market dynamics.
