HONG KONG's Orient Overseas (International) Ltd (OOIL), parent of OOCL, the container shipping arm, with year-on-year revenues more than 98 per cent of the whole, posted an 86 per cent first-half net profit decline year on year to US$236.59 million drawn on revenues of $2.92 billion, up 6.9 per cent.

Container revenue improved 6.8 per cent to $2.9 billion with the Asian trade producing $1.92 billion; North America, 525.1 million; Europe, 400.7 million and Australia, $72,7 million.

"Following the record result for the container transportation and logistics business in 2010, trading conditions in the first half of the year have been difficult and the outlook for the full year is disappointing," said the OOIL statement accompanying the results.

"Demand levels remain reasonable as reflected in an overall year-on-year increase in liftings, but, with the rate of new capacity introduction having outpaced demand growth, freight rates on many east-west trades have steadily deteriorated since last year. This is particularly noticeable on the Asia-Europe trades," OOIL said. 

"The container shipping industry remains competitive with a fine balance between supply and demand that sees rates fall rapidly when new capacity is introduced in an injudicious manner," said the statement.

Year on year, revenue from the transpacific services increased by 6.9 per cent in the first half of this year, resulting from a 2.5 per cent increase in liftings and a 4.3 per cent increase in revenue per TEU.

Liftings increased 13.3 per cent on the Asia-Europe services compared to the corresponding period last year. But the trade suffered a decline in rates in the first half against the highs in 2010 due to the influx of additional capacity. 

Transatlantic volumes increased by 6.3 per cent and revenue increased 18.4 per cent with revenue per box rising 11.3 per cent year on year with steady demand growth against moderate capacity increases.