ZIM Integrated Shipping Services (ZIM) 20 Nov 242024 Q3 Earnings call transcript

Ladies and gentlemen, thank you for standing by. My name is Christa, and I will be your conference operator today. At this time, I would like to welcome everyone to ZIM Integrated Shipping Service Third Quarter 2024 Earnings Conference Call. [Operator Instructions]

And I would now like to turn the conference over to Elana Holzman, Head of Investor Relations.

begin. may You

and Results operator. ZIM's Quarter Third Thank Call. welcome Financial Conference XXXX you, to

Joining call CFO. on CEO; me the and President Glickman, Xavier and ZIM's Destriau, ZIM's today are Eli

remind reflect We Before I and that statements of call, that events the predictions, will we we our or wish assumptions current you expectations expectations, during forward-looking such materially. regarding or would to expectations this statements begin, make to projections company's the caution you only that results like results. course reasonable. events actual that are may future believe We including differ, and or

our You referred Form XX-F annual with kindly company statements. and documents to report the risk factors filed the XXXX. forward-looking March these SEC obligation cautionary including language filed no with are and We XXXX consider in update Securities undertake the to on described the in the Commission, Exchange

time, Eli over to I turn At like call Eli? Glickman. the would this CEO, ZIM's to

you, and Thank Elana, welcome, everyone.

with proud in carried in we as ZIM's performance are our financial We quarter, results. exceptional record as well strong again volume which the which underline delivered third profitability, strong

continued adjusted see EBITDA quarter margin the EBIT income We $X.X of $X.X Slide in and financial you EBIT indicative billion, at $X.X with We third strong $X.X our was billion was position. of end. Adjusted in can and quarter, of margin revenue of billion X. XX% $X.X billion, as adjusted maintain of total billion generated net and of EBITDA liquidity adjusted XX%,

Slide X.

'XX. expected results improved months for recently QX X better than and Our are outlook

billion between billion year guidance anticipate 'XX to $X.XX and adjusted our EBIT now raising $X.XX full are billion, adjusted $X.X EBITDA between $X.X We to billion. We ranges.

share a special balance per $XXX QX a generation regular of will we to On of our dividend per to on or dividend share the distribute been dividend has shareholders to is total $XXX million our per dividend. capital a sheet, pleased declared our improved strong which of net are share or $X.XX thanks shareholders $X.XX QX Also, of income as we of substantial on share, share dividend. per today with million of of account of and basis, Board per with a Returning to special Directors has top always success results, our policy. $X.XX and priority a date cash [indiscernible] made this up $X.XX XX%

Slide X.

than result to quarter's higher highest we delivered XXXX This the COVID have the any since prior were QX extraordinary market. period and

were have commercial prevailing to quarter continue this market these going freight initiatives and While results position competitive undertaken earning conditions. forward regardless We us power. benefit we also improved to by driven maximize actions will important strategic our and that rates, elevated our have of believe

strong XXXX, series transformation 'XX in vessels, including LNG-powered year. and First over and delivered foremost this evident our course, is, we of results 'XX, to renewal remind of and be our program. of To are agreements fleet benefits XX charter secure container 'XX. the engaged to XXXX in long-term a already course you, of our The in fleet XX driving newbuild ships

Entering 'XX more in as newbuild, some efficient vessels XX receive XX% cost-efficient and planned, fuel redeliver new and our be resulting capacity once all capacity. and we will fleet older of capacity

making and improving grown Our average the cost operate vessel trades our to size better in we has which our fleet suited structure.

grow on has important LNG vessels. with adopter our be capture operating the was this our capacity volume trade X us to enabling additional commercial an will early LNG, the differential to capacity This Coast carriers trade. East been LNG-powered. supported our U.S. to we which of for an efforts of as operated Moreover, be Asia services first currently only and gas about on XX% ZIM

utilization of is had have our we In compared we cheaper of from XX% our since efficient impact to LSFO LNG us LSFO, first environmental more also TEU has early consistently financial the LNG. than and addition operations, 'XX. been LNG ZIM XX,XXX reducing benefit vessels to in to as seen delivered

fuel LNG, the LSFO covered with access Shell. as and by with our East on us services reliable benefits. to ready is ensure supply which additional entered agreements these operate U.S. long-term LNG as agreements. Shell, our now LNG strategic enabled are to available to This reaching capture Coast supply by not cost Recently, an has into vessels and we Importantly, agreement dual we LNG

place with recently, new with covering operational position agreement better Asia port competitive to coverage. help agreed by U.S. trade. in Hapag-Lloyd, collaboration improved the us replacing XM. collaboration Coast on reach also Atlantic MSC, have customers also larger efficiency greater the More improve with we vessels operational trade well our to operational to as allow East agreement we collaboration network Our the other product enhance with the agreements new promoting as utilization us offering These of a our and to

have capacity 'XX new cost commercial in and was operational While independently, 'XX. to significant the [indiscernible] build growth support competitive and capacity to secured, we undertaken prepared derisk its these operate strategy collaborations

the also to have year. volume necessary this We been our planned growth proactive equipment support in securing

TEU, I represents QX high for growth. global outpaced XX% As This contributing year-over-year mentioned, already strong to reaching significantly a factor results another has volume key XXX,XXX ZIM. been which market growth, container our growth record

strategic in the progress our owing with in investment U.S. gaining Coast particularly to share, pleased Asia our trade. to market fleet, incredibly ZIM East are on We

Identifying growth at delivered opportunity America, U.S. growth Latin examples we focus more just commercial have growth services demonstrating expand area core to carriers to the which Asia Identifying recent America, I on the our the for and a and be capacity are XX to also expedite potential example. agility newer been carrier have focus trade. mentioned, Two in and from one West this on continue capitalize our 'XX strong to on is relaunched volume ZIM. Coast Latin significant the in expanding opportunity strength and ZIM. We a

strategy was this decision our exposure contribute we to that volume. to to spot commercial Another made QX year increasing strong our results

our contract will the you earlier and volume from the more choose a previous Transpacific benefit to on in significantly the third spot we spot pressure XX%. trade in the upward rates split deviate year, instead our to ZIM from about This to exposure recall, in spot and saw ZIM between enables approach increased of XX-XX As quarter.

Slide X.

of ahead, that [ market trades 'XX setting a growth Looking period extended for in dynamics ] point of for to outpacing supply up following demand still and strong 'XX, most 'XX. has reversion

rate by environment conditions the unpredictable, and can ] the industry. [ shipping times volatile macro However, to and factor external be dictated

structure and commercial focus to been operational that resilience. to our fundamentally fundamental continue such, our is our year compared important be is It will has as and As to cost ago. today highlight a better in on position improving and 'XX in have is materialize complete begun on today. concluding, of period strategic our as our The already have as planned. transformation our 'XX and are to this transition track fleet of we fleet investment The detailed and I to year -- benefits

the Our capacity can improve will in we are terms choose operated environment. position in and of operating to in as flexibility similar owners. or beyond which could We of 'XX, redeliver renewal total vessels our 'XX size on further and market 'XX to up capacity, the regaining of back a for depending we scale continue XX which

continue taking both that advantages operationally to benefit conditions build of we of evolve, market ZIM to record intend and attractive financially. and on remain track opportunities agile As our

have modern have the as players position steps competitive shipping fuel-efficient cost confident are agile we with We our container that taken solidified a an and fleets.

results, environment. On call financial the detailed additional go updated our market ahead. I over CFO, as discussion more guidance please of for Xavier, our this will a well as on turn note, the our to Xavier, 'XX comments

Thank based and operational you, freight Since on present strong reflect demand welcome, Slide elevated and rates. financial third key momentum On highlights. financial Eli, quarter X, continued results again, everyone. we and

average the and TEU XX% XXX% rate Our $X,XXX, was freight quarter year-over-year a prior third from quarter. a increase per increase

And on year, was the During increased and a growth had was of X the first year-over-year. impact QX per XXX,XXX in ZIM's to rate strong higher months At record given higher carried earnings XX% of rate time, XXXX. TEUs TEU freight compared positive Eli XX% X%. of mentioned, growth volumes the $X,XXX a X same the our quantity carrier first our market environment. average favorably have as ZIM's months the than of of

cargo, non-containerized services, car totaled of million from year. last reflects mostly the $XXX ] carrier for to compared which million our third quarter quarter Revenues $XXX [ the in

in the first up were XXXX X revenues months of Total year-over-year. $X.X billion XX% of billion or $X.X

in flow the of million quarter cash free to Our in compared $X.X third billion the $XXX XXXX. third quarter totaled

X balance the charter net with Total by vessels to incoming our with million year-end. years, to this have And we predictability received, durations to sheet. that $XXX core for you remind of a Turning to the newbuild is mainly since longer-term a to like larger vessels due the of especially increased are cost LNG chartered that the period creating in the debt respect I'd effect attached. structure capacity. capacity now XX prior

Furthermore, we as vessel the these of the options Seaspa very as us as period owner. options, extend hold if charter we well XX the to purchase destiny the control vessels were LNG ships, full over on giving much actual

well to an and to of of smaller of X in from earnings X delivery with redelivery TEUs ago of Turning resulted This vessels. vessels total change We XXX XXX,XXX from car ships compares as approximately call our as fleet. capacity months X overall of including The August. our as vessels, builds currently XXX the XXX operate XX container carriers. prior new fleet the

like operate continue grow. similar capacity vessels, a continues number we that of to reiterate I'd to to operating may while our

is fleet program, And less ago. larger, replacing size years about our fact, the compared smaller In X cost-effective larger fleet cost-efficient operate today, capacity. vessel with more newbuild with as we we to are our average XX% tonnage transformation

had XX,XXX XX our the X the our smaller vessels and the LNG wide X,XXX of all XX,XXX XX LNG TEU fleet, and beam, XX join committed of including XX have joined TEU X,XXX vessels call, vessels, XX XX newbuild TEU ships. today's TEU of XX As ZIM to fleet vessels, X,XXX -- of the

to late now XX charted XX and capacity, newbuild average trend remaining is August. in to the continues months compared of duration down Excluding our the tonnage months

charter a vessels XXXX for up still during as of newbuilds compared period. remainder We have X X the the to the total of in delivery renewal expected of same

our as renewal operating opportunities. XX up to the which, better for vessels So and vessels for optionality next XX approach us align provide market in up renewal we as with mentioned, capacity Eli year we XXXX, another XXXX, have

was third now were $X.X the and Adjusted XX% QX as last to for quarter and billion, Slide third Next in EBITDA and and months. loss EBITDA present EBIT compared results last XX% XX, and EBIT billion. XX%, year. compared quarter third X year's in EBIT an X Adjusted respectively, on of the this first QX margins financial months $X.X ZIM adjusted XXXX was to year's quarter we and

EBITDA margin EBIT $X.X margin XX% XX% compared adjusted and XXXX, the quarter to in income to For of was and billion QX EBIT of first This a is Net compared months loss X an the was was $X.X net XX%. loss adjusted XXXX. in XXXX. billion in third

reminder, year last noncash a was of $X.X in impairment by charge net As a loss primarily billion. QX driven

We zone. volume here Slide present our Turning XX. to carried by down now trade broken

As capacity Transpacific vessels and saw third trade Transpacific, in year-over-year. growth volume the XX%, and you and to America significant see, quarter, new the America lines. Latin Atlantic larger in can attributable and grew we XX% respectively, Latin our

We remain growth to we continue upsize to target capacity of during as growth the volume see expect this and achieve double-digit our our year. XXXX continued remainder volume track on to

is bridge. Slide On XX cash our flow

of $XX $X.X of cash cash service, related billion downpayment million on as of Other For the to converted and for liability third into include of EBITDA dividend the flow the million million. quarter, our $XXX billion the quarter In repayments generated items activities. vessels. our $X.X significant QX, a in mostly from debt delivery a X of of paid quarter, flow adjusted operating we our $XXX lease LNG

guidance. XXXX our to now Moving

$X.XX outlook Eli, EBITDA stronger year adjusted you and the billion. billion adjusted are assumed. billion As between raising billion XXXX is XXXX $X.XX between and we guidance previously such, our already our now expect of to And for generate remainder EBIT and $X.X heard $X.X than full from as and

and prior bunker since cost August. in guidance Our double-digit volume assumptions haven't for our we provided growth changed

stronger However, the overall rates from had was expected decline the the initially for we peak in in performance a in expected year. anticipated, summer slower than freight early resulting

the a open market. the we on to Before call few comments questions,

saw very significant what loss-making potentially XXXX, a of expectation this drop year was we anticipated. differently which significant due absorbed Sea Looking developed drove the From freight initially equilibrium than upwards. to capacity develop an oversupply, to rates to coupled rates causing back by Red with the demand, relative better-than-expected levels, diversion, at

oversupply of such as growth in lesser the the to risk fleet between elections, recent from and order the U.S. gap continues beyond, geopolitical XX.X%, uncertainties and Sea duration of to in than XXXX growth matters with or of to supply the especially Red the addition to to crisis forward stemming Looking to book impact the XXXX. the of the recent a ratio extent exist, though demand the

the also that is XXXX absorption it's book is order easing the XXXX, period. important note Rather, delivery to schedule typical the to XXXX, Yet stretched the even out of longer capacity. of it X-year this than current additional and

Scrapping to at stringent the decarbonization to operate making over In to likely drive also idling industry especially emissions. decarbonization can Moreover, the continue so manage require the or since XXXX, of certain meet customer as several vessels. to also well carriers scrapping term, able industry The capacity. will next modernize their mandates not short emissions reducing catch carbon begin they agenda older on utilize industry did uneconomic more levels. almost regulations up, IMO are expectations carbon years, will should to some the enforced, point, as of to our on will more it fleet steaming as agenda slow meaningful it happen be players and to

now On the to that we open call you. Thank questions. will note,

Omar [Operator comes Your Nokta Jefferies. Instructions] from first question with

Obviously, bump. quarter, big exceptionally strong guidance

just dividend. First, maybe on the

quarter or ZIM million jumped if by just into position dividend, here your decision end. But payout, sense mind of guess, above maybe in go I a billion into XXXX? the payout, factor you ]. thinking perhaps at as how us Board's to particular. XX% confidence commentary the has good how [ uncertain and does an got don't outlook. that seems for level the full you've the just up true also a cash of you're then here that are Your whether the hearing it's to ZIM actions about terms of you positioned giving $X on to the we and that -- special on And of $XXX the not in It

Okay. second question. addressing the Thank Omar. you, Maybe your of part

be commitment as you top when capital true shareholders think, much than dividend the to return this the to why pleased this I very to and up quarter, us vis-a-vis indeed able can as as situation are the regular our being We to to with we dividend. dividend quarter our we allows. initially rightly is, year And our again the and the remainder planned of order pointed up is somewhat also stronger a hence, decided out, top third outlook regular special what for for our have we

Just much at $X.X to in in we've get numbers. company X-year per context, we this look billion and to a became things or including into this returned what our XXXX, dividend over has shareholders we those happened capital we $XX.XX public share quarter if how period, returned since

on delivering are we us commitment quarter. this is it So our that doing

happen in to Now the what when may or comes what it March. question of will

potentially income between the topping XX% have to will Our terms of of to the net what in current that our review dividend over generated up we the period. March policy XX% stand full year in Board and do will dividend

will decision -- The take place in place that dividend in and March. will policy So discussion remains unchanged. this

into back the looking we going XXXX. at like may Now are end look towards of the a what in good XXXX. market performance pointing towards Clearly,

So anticipated good what a we months a QX August, few QX back. better a in and certainly than

for of lot very well XXXX, potential ahead. is very there lie ahead to company thing the element Now of are well a that looking sure, navigate volatility us. One uncertainties prepared into is the is equipped and of that

market But to ability the our what control be. situation changing we So we conditions. don't react to what control geopolitical fast will is

the than they from demonstrated us and mentioned our trades trades our Southwest the extra vessels that Eli our Pacific rapidly and move prior reopening Pacific serving Pacific capturing again, Northwest very to We quarter I this quarter to contributive think, capacity -- more in and redeploy generating. were trade where swiftly the Southwest, to moving profit ability are and in in those the have, others.

ourselves potential there for growth where also are a positioning in into we strongly believe the market We are very future. significant

where is growth our benefit area Latin believe on in from seen that You've future an trade, quarter-over-quarter, years future America growth. we year-over-year volume will

not least, fleet vessel our we XXXX, are looking last at into transformation. And our completing strategy, but getting now

So in XXXX, we remembering those that in which efficient, before of surge cost core a having a elevated and a extremely that newbuild ordered our now environment also 'XX, fleet, thereafter. being vessels significant inflationary is before led to price capital the cost

the today. deal would good that of very placing a what got costs be orders those compare type to we we we incur So we would if similar were if

in being brand-new -- the if XXXX our we is efficient entering flex our market fleet be the we ability be capacity represented XXXX, have are about. of LNG the we -- [ what ships returning with environment [ of potentially for XX% our need XX that vessels may of depending XXXX by might XX in we be ] and fleet talking core on to XX% operated to, like up down this less by ] smaller, the powered, ship, renewal So were regained that will that

recently. Very like And give the as in could year spot just strongly. here, a finishing and helpful. looks the been follow-up, like, on you some we what market, just of Maybe maybe Great. relatively you've maybe off color just we're referenced it seeing terms here

have had here going down wind has bit season wind recently? things does of season, going kind the How peak You to conclude. peak how started up a as been into a little of --

terms of, only Coast, market. X effect strike very to that quarter the say, then them Anything obviously in lingering financial Any days, terms impact? of East talk the on active for you're in about? And in the lasted fourth U.S. it in

a seasonality the in the consider quickly, I mean the important date the in to after very Week, which element of is very very, Golden I industry, is think back quickly. our volume came very Yes. first

on So volume fourth a the confident we of our stronger are deliver -- quarter, carrier quite this in to why also is ability the TEU.

So the the demand be a may very pick things Chinese demand and strong, after -- up after strong to explain that Golden why was was there few can Week. shortly

the driver, of next strike early the the January from fear Year New end potential the a from potential XX that also timing fact in that Maybe the the may and of one place quite fear come of Chinese take will tariff January. U.S., perspective, year was towards the

have triggered cargo that they quarter. volume of being the also, towards today, might to So -- some -- strong end we currently of third the And in especially -- the the also rush a the sort moved as Asia U.S. between see

So Golden that see some on did But is normalize peak as was most again. up pick what post And obviously rate to July. pointed we the the some supporting reached the the trading, rightly a we few seen you of we've on the in other past And rate stabilization is environment. to out, and the of after starting rates seeing weeks are environment. even started rate trades, that Week, in over sort

policy effect see will of will potentially need how towards towards January, until of part in we be up the that, continued points a the the up until be today, growth and demand the points at of Trump everything will to will the second we move But finish of part end Mr. So and demand. what Year, XXXX, forward. good least towards I better the think, going a for XXXX, Chinese then new New of

add, would I like you. Omar. to thank Xavier,

think results, dividend special $X.XX than these billion. the of top $XXX on The million. $XXX million decision higher I on of

XX, see new our record we that that LNG company in the South the impact. new of our Coast with to China in the open efficient from West fleet, to see our and show that, L.A. with million. top totaled our from have breakeven, that, strength, contract. to by confidence We Our Asia, us to ] from On South the call take the line decision, very vessels rate the $XXX decision below the this fleet vessels, and our we in we [indiscernible] prefer not line volume the of approved on surrender decision company. are the confidence. decision results. it, long-term America, [ top special customer to adjusted have, to [indiscernible] a we spot And to enjoy the our the price $XXX the and show agility million, to year to L.A. of Shanghai, high We And of Asia new of the on top to let's the reopen Board big dividend

strong the see we So we and believe the of we future believe in company. cash the company, flow in

Your JPMorgan. the comes [indiscernible] question from line next with of

I questions. X had

Just took from held kind positive to give near that good you some you hear reversing you to outlook the year? What gives very impairment Because special of the dividend back the confidence firstly, term. incremental last outlook that's that first driven improved Could of I believe was things kind suggest of question. more now market. the decision reconsider that the my impairment kind underlying? the by you you that of So have not

And capacity just 'XX you is then what out of that of of weaker? come vessels could smaller, in clarify, potentially out kind turn kind this should percent on your market less secondly, can the efficient Xavier,

then of ask is you the weeks? or constraint if scope duration, arriving can benefit kind of in your hearing for half I I timing buildup in there of further mean of the next kind the XXXX are actually of customers first couple What into inventory U.S. more. the from the one term? near And

asset the is will cash discounted it are future process of terms to So your book as [ flow. as considered our concluded of this potential try on to accounting generated when that first that a is this we bit Back matter, the little what Alexia. clearly complex maybe is explain our in value question, the I analysis, September but impairment, I'll value with XXXX, can. the benchmarking when always against assets impairment a ] in in be a respect gets forward-looking of we of

it's looking. So always forward

significant not -- what really so does in role of or behind in impairment. any reassessment has play happened And assist every the a subsequent significant

we did the already left reassess indeed amortized said, been has was some prior book our of impairment quarters, past it being amount portion months. that already overall look or and like XX significant this it in the because of a So that has and quarter over

And when use we WACC which into affected ahead also years, by macro when and cash the thereafter, terms we discounting look 'XX, interest rates, risk also we and rate, updated in of the is terms environment, in our forecast, the compile when terms country 'XX in Israel. ] [ future in year of of

book So assessment assets was finalize there is that when anything. assets, a That's and of play. we to overall assessment. change the saw data value in impairment what the of impact was into concluded of of the comes the immaterial that an there lot expected, compare And we we the realizable no that value terms need same were, of was left the why there

basically 'XX, to understand, a capacity the maybe when the forced is in have what line we been terms, been, value help that with high. would post time charter to in impairment that translates is nonaccounting had charter were And pretty the into, much rates at 'XX suggesting not asset book in value a what very

away assessment of is the accounting this looking walking way think I from perspective, at pure of an economic from treatment it itself. the another impairment

a terms that the the have respect capacity with chartered renewal combined XXX,XXX. ships. the XX those ships between up Now TEU XXXX XX we of years, are second a the represent total over indeed received than smaller of for one vessels XX of your in of to are out past that XXX,XXX, X question, vessel in ship Altogether,

at TEU that that is at we total what end look the up close if to capacity year-end, So we will XXX,XXX TEUs. operating meaning

have early [ get let year out ] potentially we having next go that existing penalty could to of will We face an without XXX,XXX any charter. TEU to

again, the first for the if [indiscernible] the leading efficient, will will emphasize capacity, which is that very efficient more more to the that expensive, with always what more far operating them, operate, are of vessels. see ones to happen far that company efficient. the core any cost we'll us to be less with was leave But So vessel fleet, those potentially we important there be

a referring you for I main level, in the terms Third, for think relevant U.S., ] see do the place of you us at Transpacific think, the extremely trade inventory inventory restocking it levels as that that is what of is on summer. of U.S., and asking to sort to be in to abnormal from in destocking about maybe this maybe is, were and market look to U.S. the which over I today we the inventory The some are obviously, the battery U.S. one at level us came a strong expected were our period ratio. -- the clearly, in think of the we sales that took We've XXXX inventory year. compared been of normal has [ time see in I demand data We the to resilient If not and lanes.

us into on we that. right this So U.S. don't there we see don't quarters subsequent feel XXXX. that stage, going now in bite in buildup might the back too alarmed that might be inventory a At

And Cape about to comments premise on Obviously, I that risk helpful. What of you're the very oversupply lesser but extent. follow-up is just can talking gave you That's Good perpetuity the earlier. kind continuing, or the of Hope in of ask really on? likely lesser one oversupply what a on basis the that the of continue journeys standpoint? is, will Is on kind it view yes,

I Look, hopefully, that opine when Sea the change to of Hope change. potentially as later. rather situation very to mean, situation, it's will Red or Good will Cape it sooner the than difficult crisis But

than industry, global the year, overall was being year. of significant referring TEUs to what the are of tonnage delivered X this I more And of here X newbuild XX% being year think deliveries, shipping newbuild terms this in is in to of delivered XXXX million delivered we equivalent capacity

to mean amount, we X I going million it's that million region of And in already X.X TEU. then in know think the XXXX, we XXXX, it's In still significant far I for now, a TEUs capacity. be are of less.

industry very Sea carried But At are will obviously is which the meaningfully was came capacity Sea So some expected that an the year-over-year. additional situation still point, to in. Red on Red important this a quantities we that Clearly, of absorb in front. terms in year disruption XXXX dissipate. growing contributed help

important that to an consideration taken. be element So is of

scrapping is would the have in to approach in of take capacity tonnage. this also when. a this will of -- There will should matter And be the pushed a -- sell, an no other retired. circumstances, need it's IMO to not that a and second, vessels of out will out the vessels be lot with if, regulation. need circumstances should be normal And a it's soon. matter would and enforcement it's of older they will There those They longer fairly been of -- happen

And today, one Cape answering surge think element around the the to again, of finish to work go to in I with cope the or Hope. If could Good capacity, look required add order we we question. of around to other

If you up speed, XXXX. the from went it average at vessel look

XX.X that [ XXXX, I capacity room clearly below having in is average note [ think the absorption. fleet significant on on selling one today, is the was [ So ] average, XX.X. is also at effect ] note ] there a different

when the reopens, in potentially mitigate will this the of effect drivers influx or capacity. those all come around So to [indiscernible] the also route risk of

going things overlooked, also, should risk is a mitigate think, I there there could risk could series this and meaningful overcapacity. that risk not happen -- are of of that that of But be extra The forward.

with next comes Sivakumar the from question Your Sathish of line Citigroup.

even do actually being flat the freight growth that seasonality? as here, at on Xavier Is good you adjusted here, results such. I off and in X I guidance volume average might versus got I rates with quarter-on-quarter. the the [ congratulations If and actually ] assumes it Eli the the actually. uptick end, questions the see start an correct? Or on guidance, for -- QX top Glickman, look

the QX? then second of through went end spot Are any volumes around What using changed color contract has as Has still the is is the And the looks volume of XX% it the on that? mix question actually we here. does Transpacific And year? like at still around split contracted? that you versus around your

vessel third utilization. then And the the one is around

Again, just around looking LatAm getting any -- utilization where If fully say, very vessels you're higher you are some versus Intra-Asia, pressure some on seeing, have lines, color into utilized. Transpacific trade within specifically, trades. the versus your still you seeing like

growth impact final the there services volumes Transpacific help splitting also not TAM, launched volume was there into the basically year, growth, Asia. between East service understand the of and year-on-year versus, this you year, then actually express would on last West volume those which movements from Coast Coast Can us then say, helpful very strong one you here. And be West

the for Sathish. you question, Thank

grow them period. look so as into take with our expecting baked I'll we continue one. assumptions to starting slightly our the first fourth to while volume one also are X still same the to year, at vessels incoming ships now We indeed guidance, over So the delivery we the have delivered we X end If quarter, the by us and be have the effect new we will between for the the continue of will one, of see for capacity. that to smaller

and to additional fill capture will operating a net, And also market that ships. grow those we share result, to tonnage. continue be we able as So our we believe

we've carried quarter. this the So the that to trend on TEU expecting continue the are quarter, fourth net same we into XXX,XXX

for assumptions guidance is year baked yes, our versus into So last growth QX. volume there still

carried average in the [ the in in per the will already in not the rates In QX, of compare rates terms terms of fact rates, when third but on of -- again, close the as reached from environment if because we carried descent were achieved the through be stabilizing, within about -- quarter. rate the as the spot QX, declined freight that within strong talked now TEU and see we ] indeed some the TEU the rate will high we we overall, average July, did but of QX still you freight rate

is now. see generation But the stabilization in carried TEU on average, we per than a to revenue one QX average less in expected QX. So be the

minimum us year the With contract exposed being The initially changed saying being that more so season you're a the vis-a-vis it a first for to versus in what way, rate, in hasn't market throughout led was contract, compromise than and quarter. had the ask contracts that discussed spot set regards question this are for decision planned. not spot in to -- very our contract took the we That on earlier us. our we during to that the customers year the right important on

between of as today QX, of spot. end and were type on split and And XX%-XX% contract so the of we the as of operating still

we into take in to is next enter So and soon XXXX. for going discussions will early year, the that place

only to in to We we but which happens philosophy, being But we are are there. a will abide what to. see that strategy probably agree the company, is set those contract, long-term by we seeking, to are providing terms of lock rates that at from overall obviously, will continue our happy most

the I on demand mentioned, resumed today, question Week, the up rapidly as back thereafter. volume following or the Third went very utilization vessel Golden

And much optimum and vessels so are pretty full. our capacity sailing at

it and New has minima be next on So have the Year, explained this which earlier is time to strong we on is strong, year reasons January to the continue ], been up until set expect [ until, and for since, at strong ever we Chinese utilization XXth early year. of think, next

been Cape. volume sailing you not the still experienced for disruption to add And but effect the had we fact have asking trades Sea way, -- we only by important of that coast to we the in since and around capacity us, finally, that the the It's the Red are the around very Transpacific the were QX, growth.

effect So it's that the in And what capacity us has earnings are the Eli important been to the being very trade that quickly the ships recovering the because type very low XXXX. Transpacific environment. the with also And in ] of the potential. I comment on on service momentum much to echoing The ripple capture weekly made, we it was same cross-sale to deployed added the of order the maintain maximize think our Transpacific. and to from pretty [ freight

presence that of that's So and terms demand in stronger the had But -- on full historical U.S. in strong Pacific foothold. in strong terms of a to Pacific the U.S. away where very capacity put yes, a Northwest the Southwest. that on also not -- this we the as we Coast, was took and West we service from presence East Coast, on earnings potential really and capitalized

we up Southwest. the we -- time, no longer service end year, had on period at operating where any same services this we now So year, the last last Pacific X

X are weeks service, So positively, in isolation. from transit a those fast full but contribute that the carried a and at expedite type pretty cargo both which way perspective rotation X quantities move to look X-week metric also you to volume when or in the generation to revenue

actually the customers type like that the service? what product, services, express express utilizing ] of On [ are type

on are have the that in Yes. I interested time-sensitive service, cargoes. mean all for this you services usual suspects very cater that

all you So the have e-commerce businesses. type of

the especially source also of So you is regular being have also, that And on source cargo the of with booked of in that strong demand capacity a U.S. and those that is cargo. significant some nowadays a ships is shortage prevailing

just Maybe this. -- one it. quick Got on sorry, follow-up

of So sale classify the how U.S. service, Asia point you on express service. the versus express do on that

sorry, repeat, that I'm I Sathish? question. get didn't quite Can you

Asia would importers? originating of So versus if express that point split look the originating service, out like, of at the say, of for U.S. is out look sale I what

the import precisely want wouldn't Oh, I'm sure. something but between say to export the precise would be split in out I pull be push and not frank. XXX% I I is to that tell guess here, it's split, that X something to you able

I Eli closing for conclude comments. does back conference turn question-and-answer that session, And will now our Glickman and the to over

record ever progress, illustrates third our the are outstanding quarter and strategic in of carried continue year than XXXX to on commercial best we agility stronger capitalize ZIM proud a up our objective shaping volumes that rate XXXX, for financial the positive summary, we shipping, continued to is third XXXX enhancing results. for and again fleet to best transformation, remained strong anticipated. executing for and advancing following This we position to In container the profitability. environment be company has ZIM's and year which longer long-term performance record delivered of are pleased

once year guidance. our We full again raised have

As built are business we we while look market have confident to at are dynamics fleet. resilient that with ZIM a we volatile, transformed the future, a

Our growth. continued for progress today. you Thank Thank continue implement transformation sharing a has to drive in differentiated ever. our forward us again stronger will to position next put all. joining with we And look than ZIM us the of strategic phase We strategy you. you our to

conference Ladies conclude that participation, clear. and you gentlemen, we're may and now today's call. for your disconnect, you Thank and does