Lower fuel prices will help shipping industry recover

Declining fuel prices and the country’s improved economic prospects will help the shipping industry rise from its depressed state, according to Aboitiz Transport Systems Corp. (ATS). The industry is "very fuel-sensitive," ATS chairman Join Ramon Aboitiz said. "Fuel prices are going down right now and I hope it goes down more." The cost of fuel accounts for 30 to 40 percent of shipping firms’ expenses. “The more fuel goes down, the better it will be for us," according to Aboitiz. In the first quarter of the year, ATS posted a net loss of P141.9 million with fuel costs and maintenance expenses for ships eating up most of its revenue in the period. The company made P132 million in the same three-month period last year. In the last two months, Aboitiz said fuel prices have dipped and cargo shipments, which make up bulk of the firm’s revenues, have grown by double-digit rates. "There was a 10 percent growth in the market for cargo," Aboitiz said. On Thursday, government data showed the economy grew by 7.3 percent in the first quarter. “Obviously, when the economy is strong, the consumer market is strong, it’s good for all businesses, not just the transport business," Aboitiz said.—VS, GMANews.TV