AN Alphaliner survey of 11 of the top 17 carriers that reported quarterly financial results for their container shipping operations show that carriers' average operating margin remained negative in the first quarter of 2017 at -1.2 per cent.

Only five carriers posted positive operating profits, despite stronger freight rates and rising year-on-year volumes. The weak results are due mainly to higher bunker fuel costs and seasonally weaker first-quarter liftings related to the Lunar New Year holidays in the Far East, according to an Alphaliner Newsletter.

CMA CGM posted the strongest results among the main carriers, with a core EBIT margin of 5.5 per cent and operating earnings of US$252 million on revenue of $4,620 million. It appears that CMA CGM's acquisition of NOL (APL) in June 2016 has brought immediate benefits to the company, with larger rate and volume gains on APL's traditionally stronger East-West trades helping to offset the weakness on North-South trades, where CMA CGM has a traditional presence.

In contrast, Maersk posted its fourth consecutive quarter of operating losses, with a core EBIT margin of -1.0 per cent and an operating loss of $56 million in the first quarter on revenues of $5,493 million. Although Maersk has set as its target an EBIT margin gap of 5 per cent above the industry average and to be a top quartile performer in terms of operating margins, it not only failed to achieve both goals in the last two quarters but also slipped to the third quartile in terms of earnings performance, relative to its main competitors.