Chloe D

Chloe D asked about the current profitability of ZIM's Southeast Asia and Latin America routes, the speed at which capacity can be adjusted, and ZIM's perspective on when freight rates might recover given anticipated pressure in Q4 and 2026, considering new capacities, Suez Canal reopening, and vessel scrapping.

Answer

CFO Xavier Destriau explained that profitability varies significantly by trade and week due to market volatility, emphasizing the need to build positions gradually and ensure service reliability, citing the success of the Pacific Southwest expedite service. He acknowledged threats from the growing order book and the Suez Canal reopening, which could increase effective capacity and pressure rates. He noted that liners manage deployed capacity and leverage operational partnerships, but a sustained rate recovery would likely require increased vessel scrapping, which has yet to materialize.

Chloe D asked about the profitability of ZIM's diversified routes in Southeast Asia and Latin America at current rate environments, and the speed at which capacity can be adjusted in these markets. She also sought ZIM's perspective on when freight rates might recover, given anticipated pressure in Q4 and 2026 due to new capacities, and what the pivotal moment for recovery might be.

Answer

CFO Xavier Destriau explained that the profitability of specific trades is highly volatile and depends on the timing of the question, with dynamics differing week by week. He noted that ZIM builds positions gradually in new trades to ensure reliability for customers. Destriau stated it's difficult to predict when rates will recover, highlighting threats from the order book, new capacity, and the Suez Canal reopening. He mentioned mitigating factors like vessel scrapping and decarbonization efforts, which have yet to significantly impact the market, as potential drivers for stabilization and recovery.