Horizon Lines loses $29.9M in 2Q
The Puerto Rico trade lane experienced a modest volume increase from a year ago, characterized by an improved mix of refrigerated cargo, Horizon said.
Container volume was up 3.6 percent during the second quarter relative to the year-ago period.
The Charlotte-based shipper’s bottom line was impacted by a $5.4 million increase in transit and crew costs associated with dry-docking in China certain of its vessels that serve the Puerto Rico trade.
“We made this decision to facilitate extensive maintenance and high-quality enhancements necessary to help ensure our service integrity in Puerto Rico and improve the reliability of these vessels,” Horizon Lines President & CEO Sam Woodward said.
A modest rise in revenue container rates, partially mitigated increased variable expenses, he said, adding that non-transportation revenue declined from a year-ago due to a reduction in terminal services revenue.
Hawaii experienced continued strong volume gains during the quarter, helped in part by improving tourism and ongoing customer support amid an otherwise sluggish business environment, Woodward said.
Alaska’s business rebounded from the first quarter, when record cold and snowfall exacerbated and extended the typically slow winter season. However, volume remained just shy of the year ago level, primarily due to a late start to the summer seafood season.
The company continues to project that 2012 container volumes will increase modestly, in the 1 percent to 2 percent range, and that container rates, net of fuel surcharges, will rise slightly from 2011 levels, due to the continuing slow economic recoveries in our markets. Fuel prices for 2012 are currently projected to average in the $675-$680 per-ton range.