Japan’s Ocean Network Express (ONE) has reported another year of record profits. The world’s sixth-largest liner operator bagged a profit of $16.75bn for the financial year to the end of March. That is more than four times higher than the previous year’s profit of $3.4bn. The Singapore-based carrier attributed the rise to the continued high spot market due to tight supply and demand. “Financials were consistently ahead of forecast over the entire year, and this was the third year of consecutive profitability,” said ONE chief executive Jeremy Nixon.

However, it remained “extremely difficult” to announce a reasonable business forecast for the coming financial year which has yet to be finalized, the company said. “The outlook for the rest of 2022, however, remains cautious as there are still many trading uncertainties ahead in addition to further expected economic headwinds,” Nixon said. The company has used the profit to build back up its balance sheet and cash reserves to its highest level since its operational launch back in April 2018. Ongoing trade developments and geopolitical events are still creating operational bottlenecks in the supply chain, Nixon said. These resulted from Covid-related lockdowns in China, sanctions on Russia, and labour contract talks on the US West Coast. “All these factors are resulting in ongoing industry delay to vessels and increasing schedule voiding and port omissions,” Nixon said.

Strong cargo demand this year saw spot freight rates remain at higher-than-expected levels, despite the impact of seasonal factors including Chinese Lunar Year. Long-term contracts were also renewed at higher levels. On the supply side, port and inland congestion in the US West Coast improved slightly. However, turmoil remains within the entire global supply chain, the carrier said. That lifted profits to $5.1bn in the three months to the end of March.

ONE operations in Ukraine and Russia were significantly impacted due to the ongoing hostilities. This included significant congestion in the Northern European hub ports due to sanctions on Russian way port cargo. “We have stopped all bookings via the Baltic and Black Sea gateways to Ukraine and Russia, whilst our Far East Russia services have been very significantly cut back due to the international sanctions,” Nixon said. Russia and Ukraine account for less than 1% of ONE’s global volumes. But supply chains have been temporarily impacted due to sudden changes in their local production and sourcing requirements. “We have also witnessed a significant adverse impact on global energy prices, including major increases in bunker fuel costs. Vessel charter hire costs remain at unprecedented high levels,” Nixon said.

In March, ONE outlined plans to invest $20bn in ships, terminals, and equipment over the next decade. The move is designed to wean the carrier off a reliance on vessels provided by its shareholders, K Line, NYK and Mitsui OSK Lines. Revenues doubled to $30bn in the full financial year. Liftings on Asia-North America eastbound were lower due to blank sailings caused by port congestion and vessel delays. However, a 100% vessel utilization rate was maintained due to a strong cargo demand.