Hubline exits container sector to focus on breakbulk

Kuala Lumpur: Hubline is pulling out of the container shipping business, citing weak freight rates and continued overcapacity. The Malaysian shipping line will now focus more on breakbulk.

The company said in a release to the Kuala Lumpur Stock Exchange: “The container liner industry has long been suffering since the economic crisis and overcapacity in the market is still evident. The global liner industry is struggling with the depressed freight rates to meet operating costs. The global trade patterns are fast changing which is challenging to our operating model. Consequently, competition for cargo is still very fierce and operators are struggling to stay profitable with the depressed freight rate environment.”

Hubline said the exit process will involve withdrawal from various trade routes, termination of related service and operational contracts, as well as the disposal of container shipping related assets. The company aims to have exited the sector by the end of September this year. The one-off costs of this exit are expected to cost RM350m.

The container shipping division, in the last four years, has contributed an average of 79% to thegroup’s overall revenue, and an average of -134% of profit before tax.

The main activity of the group will remain as shipping, Hubline stressed, the focus to shift towards breakbulk shipping.
“Breakbulk shipping is a viable and sustainable division with good prospects of further growth,” Hubline said in a statement.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
Back to top button