Zim Integrated Shipping reported first quarter net losses widened to $119 million from $29 million a year ago on weaker freight rates and a slump in cargo volumes.
The troubled Israeli ocean container carrier's revenue fell to $622 million in the three months to March 31 from $1.04 billion in the year-earlier period as traffic crashed by 33 percent to 410,000 TEUs from 610,000 TEUs.
Operating losses ballooned to $156 million from $32 million.
The collapse in traffic and a three percent fall in average freight rates outweighed the impact of a 51 percent decline in fuel bills, a 13 percent decrease in ship charter costs and a 24 percent reduction in terminal handling charges during the quarter.
Zim parent Israel Corp. said a shipping company -- reported to be China Shipping Container Lines -- had started arbitration proceedings against the carrier for $151 million in connection with joint venture agreements.
The case involves a container slot agreement between the two lines on routes between Asia and North Europe.
Zim said that based on legal advice it estimates it has "no exposure at all" as a result of the arbitration in excess of a provision it has made which is only a small percentage of the total amount of the claim.
Israel Corp. said it had reached agreement with an Asian shipyard to cancel the construction of six 1,700-TEU vessels at a cost of $38.6 million, to which Zim will contribute $28.9 million.
Israel Corp. said the downturn in the shipping market became "even more pronounced" in the first quarter with surplus capacity putting further pressure on ship utilization and freight rates.
This is having an adverse impact on Zim's operations, "its compliance with financial covenants and its ability to raise money, as well as on its financing conditions," Israel Corp. said.
Zim is continuing negotiations with shipyards to cancel or delay deliveries of ships, returning vessels as they come off hire, cutting services, laying up ships and seeking other cost cuts including layoffs.
Zim, the world's 18th largest ocean carrier, lost $322 million on revenue of $4.3 billion in 2008.
The troubled Israeli ocean container carrier's revenue fell to $622 million in the three months to March 31 from $1.04 billion in the year-earlier period as traffic crashed by 33 percent to 410,000 TEUs from 610,000 TEUs.
Operating losses ballooned to $156 million from $32 million.
The collapse in traffic and a three percent fall in average freight rates outweighed the impact of a 51 percent decline in fuel bills, a 13 percent decrease in ship charter costs and a 24 percent reduction in terminal handling charges during the quarter.
Zim parent Israel Corp. said a shipping company -- reported to be China Shipping Container Lines -- had started arbitration proceedings against the carrier for $151 million in connection with joint venture agreements.
The case involves a container slot agreement between the two lines on routes between Asia and North Europe.
Zim said that based on legal advice it estimates it has "no exposure at all" as a result of the arbitration in excess of a provision it has made which is only a small percentage of the total amount of the claim.
Israel Corp. said it had reached agreement with an Asian shipyard to cancel the construction of six 1,700-TEU vessels at a cost of $38.6 million, to which Zim will contribute $28.9 million.
Israel Corp. said the downturn in the shipping market became "even more pronounced" in the first quarter with surplus capacity putting further pressure on ship utilization and freight rates.
This is having an adverse impact on Zim's operations, "its compliance with financial covenants and its ability to raise money, as well as on its financing conditions," Israel Corp. said.
Zim is continuing negotiations with shipyards to cancel or delay deliveries of ships, returning vessels as they come off hire, cutting services, laying up ships and seeking other cost cuts including layoffs.
Zim, the world's 18th largest ocean carrier, lost $322 million on revenue of $4.3 billion in 2008.