Stolt Tank Containers (STC) has reported revenues of $156.1m for the three months to end February, well down on the $193.9m posted a year ago. Transport revenue fell by 14.2% as a result of lower ocean freight costs but demurrage revenue, which had been at very high levels in recent years in response to supply chain disruptions, dropped by 31.2%. Despite a 22% increase in shipments and an 8.1% increase in STC’s tank fleet over the year, operating profit fell from $39.3m a year ago to $13.3m.
Commenting on the results, Udo Lange, CEO of parent company Stolt-Nielsen, says: “Shipment volumes continued to increase as we hit a record 40,047 shipments during the first quarter – an increase of 22% from the same quarter last year – as we continue to grow our market share. The reductions in margins and demurrage revenue that we experienced during 2023 now seem to have levelled off.”
To counter the recent erosion of margins at STC, the focus has been on increasing volumes and the company expects to see its results stabilising around current levels. In the near term, the restricted transit of the Suez Canal is expected to cause a reduction in freight capacity as customers move to stockpile inventory to counter supply chain disruptions. STC also reports firming demand out of the Americas and south-east Asia, with Chinese exports also picking up.
