Ocean Network Express (ONE) reported a net profit of $285 million on revenues of $4.455 billion for the second quarter of fiscal year 2025 (July-September), despite facing tough challenges in the market. The fiscal year for ONE runs from April 1 to March 31.
The container shipping company, based in Singapore, struggled during the quarter due to fluctuating freight rates caused by uncertainties around tariffs and an oversupply of shipping capacity. However, an increase in cargo demand, especially as shippers rushed to stock up ahead of potential US tariff deadlines, helped improve the results.
There was significant growth in the Asia-North America eastbound trade during this period, with cargo demand spiking in July as businesses hurried to ship goods before possible tariff implementations. Transpacific volumes hit record highs because of this demand surge.
Despite handling more shipments, the utilization rates dropped because of the continuous arrival of new vessels adding to the already existing capacity. This oversupply resulted in a steep decline in spot rates for major East-West trade routes throughout the quarter.
Cautious Outlook
Jeremy Nixon, CEO of Ocean Network Express, remarked, “Our FY2025 2Q results highlight ONE's strength and stability in a tough market. Even with the market fluctuations caused by geopolitical factors, we achieved positive results and secured profitability for the first half of the fiscal year. However, we are cautious about the full year given the current market situation.”
ONE's caution seems justified. After a profit of $371 million in the first half of FY2025, the company is now projecting a full-year profit of only $310 million, indicating a potential loss of $61 million in the second half of the fiscal year.
Red Sea Rerouting Continues
Geopolitical risks in the Red Sea and Gulf of Aden are still forcing ships to divert around the Cape of Good Hope, which is helping absorb some excess capacity in the market. ONE's yearly forecast assumes that this rerouting will continue throughout the fiscal year.
The company has put in place strategies to reduce supply chain disruptions caused by these geopolitical uncertainties and has been flexible in addressing port congestion in different areas.
Nixon stressed the importance of operational flexibility for the company, saying, “We will keep adapting our network and optimizing our fleet to meet market demands and ensure reliable service for our customers.”
ONE has been actively reviewing its cargo management and vessel deployment to improve profitability and is closely watching the uncertain US tariff situation and developments in USTR policies.
The global environment remains unpredictable, and ONE acknowledges that the overall market conditions may not be as strong as they originally expected.