Reduced rates put the squeeze on lines

P&O NEDLLOYD made an operating loss of $68 million (R695m) for the quarter, traditionally the weakest of the year, which compares with an operating profit of $31 million (R317m) in Q1 2001.
"This is despite the fact that volumes were 9% higher than in Q1 2001 and is because average revenue rates were 17% down on the same period last year, " says Nigel Pusey, m.d. of P&O Nedlloyd South Africa.
"Cost saving programmes have already contributed significantly to the reduction in unit costs compared to Q1 2001 and the new savings programme is on track to make a further impact later this year and in 2003. There are early signs that the reduction in revenue rates has bottomed out but pressure from industry over-capacity will remain."