by Lloyd's List
30 April 2025 (Lloyd's List) - MASSIVE uncertainty has prompted the world's sixth largest container carrier, Ocean Network Express, to use scenario analysis in projecting next year's earnings for the first time - with nearly $800m separating potential 2025 net profit outcomes.
The move comes as the industry is shadowed by a tariff bazooka unleashed by the US on many of its trading partners, which could trigger volatile swings in cargo demand depending on how negotiations unfold.
And the precipitous drop in transpacific volumes resulting from the trade war stalemate between Beijing and the Washington is of particular concern for the industry.
"Considering the prevailing geopolitical landscape and the significant economic instability introduced by recent tariff developments in April, forecasting a precise full-year profit figure for FY2025 presents considerable challenges," ONE said in a statement.
The Singapore-headquartered liner company’s fiscal year runs from April 1 through March 31.
ONE pegged its baseline full-fiscal 2025 profit estimate at around $1.1bn, predicated on a relatively stable business climate.
But profits could plunge to $250m if soursing conditions led to cargo erosion on some trades or even global freight rate declines, it warned.
"We have formed a dedicated task force comprising representatives from our global headquarters," ONE said. "This team will closely monitor evolving economic conditions and ensure the timely communication of critical updates."
It marks the first time since its 2016 formation that ONE has published varying forecasts, underscoring the unprecedented uncertainty now engulfing carriers.
On top of tariffs, the box shipping sector also faces variables capable of altering supply-demand fundamentals - from Red Sea rerouting to new US port fess targeting Chinese-built ships.
For now though, shipping lines are still posting decent earnings. ONE notched $309m in net profit for January-March, lifting its total for entire fiscal 2024 to $4.2bn - more than triple last year's tally. Full-year revenue also grew 32% to over $19bn.
As of end-March, ONE operates a fleet of 263 containerships totaling 2m teu. It also has 49 vessels on order.
