Japan's Kawasaki Kisen prepared to reroute more ships away from US over tariffs, CEO says
"There have been times when ships couldn't be fully loaded on some routes, and when we reduced the frequency of container services from East Asia to the U.S.," Igarashi, who took his post in March, told Reuters in an interview.
"We're adjusting our fleet capacity according to cargo volumes."
One of Japan's major shipping companies, Kawasaki Kisen has factored in a 30 billion yen ($200 million) impact from U.S. tariffs for the financial year through March 2026, citing a hit to the car carrier business and lower container volumes and freight rates.
Igarashi said that the container ship business would be especially affected by the outcome of U.S.-China tariff negotiations, which the company was closely watching.
U.S. President Donald Trump has threatened higher tariffs on a range of trading partners unless they agree trade deals before an August 1 deadline.
Depending on the tariff rates that various countries ultimately face and what they do to trade flows, there could be some positive impact if shipping distances lengthen, Igarashi said.
To adjust to tariff-related demand at the operational level, Kawasaki Kisen could redirect vessels from U.S. routes to Europe, the Middle East, Australia and Africa, he said.
"When it comes to strategic adjustments, we may, for example, reduce assets in the form of vessels a bit, but unless we are clear about the direction of trade policies, we can't suddenly make drastic cuts," he said. "We're still in the wait-and-see phase."
($1 = 149.8000 yen)
(This story has been republished to change photographer credit in the image, with no changes to text)
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
13 minutes ago
- Reuters
OpenAI prepares to launch GPT-5 in August, The Verge reports
July 24 (Reuters) - Artificial intelligence pioneer OpenAI plans to launch its GPT-5 model as early as August, The Verge reported on Thursday, citing sources familiar with the plans. The new model, which was expected to launch this summer, will be positioned as an AI system that incorporates distinct models and can perform different functions as opposed to just a single AI model. OpenAI did not immediately respond to a Reuters request for comment. The Microsoft-backed (MSFT.O), opens new tab startup's GPT-5 will incorporate its o3 model along with other technologies, CEO Sam Altman had said in February, in a bid to simplify its offerings. The startup ultimately aims to merge the o-series and GPT-series models as it looks to create AI systems that can utilize all available tools and handle a variety of tasks. "While GPT-5 looks likely to debut in early August, OpenAI's planned release dates often shift to respond to development challenges, server capacity issues, or even rival AI model announcements and leaks," according to the report.
Reuters
29 minutes ago
- Reuters
American Airlines forecasts wide range due to economic uncertainty
July 24 (Reuters) - American Airlines (AAL.O), opens new tab restored its full-year financial outlook on Thursday but offered a wide range of forecast, citing broader economic uncertainty that is hobbling consumer spending on travel in the domestic market. The Fort Worth, Texas-based carrier expects an adjusted loss of 20 cents a share to a profit of 80 cents a share in 2025. The midpoint of the forecast is 30 cents per share, compared with analysts' average estimate of 61 cents a share, according to LSEG data. American, which generates more than two-thirds of its passenger revenue from the U.S. domestic market, said if domestic travel demand continues to strengthen, it expects to hit the top end of its outlook. But if the economy weakens, it only expects to be at the bottom end of the forecast. "The domestic network has been under stress because the uncertainty in the economy and the reluctance of domestic passengers to get in the game," CEO Robert Isom told analysts on an earnings call. American's shares fell more than 9% in morning trade. The company's outlook contrasts with upbeat forecasts of rival Delta(DAL.N), opens new tab and United Airlines(UAL.O), opens new tab. Alaska Air Group(ALK.N), opens new tab has also reported improvements in passenger traffic and pricing power. American said tepid domestic travel demand impacted its bookings in July. Isom, however, said the performance is expected to improve sequentially in August and September. "We expect that July will be the low point," he said. Still, the company expects its domestic unit revenue, or revenue generated from each seat, to remain lower year-over-year in the third quarter. Its non-fuel operating costs are estimated to be up as much as 4.5% in the September quarter. American expects an adjusted loss per share in the range of 10 cents to 60 cents in the third quarter, compared with analysts' estimates of a loss of 7 cents, according to data compiled by LSEG. Most U.S. airlines withdrew their financial forecasts in April as President Donald Trump's trade war created the biggest uncertainty for the industry since the COVID-19 pandemic. While some have reinstated their expectations, there is lingering uncertainty as to how the economy will fare in an ever-evolving tariff landscape. Demand in the domestic travel market has remained subdued with budget travelers approaching their plans with caution, hurting carriers that primarily service the U.S. domestic market and price-sensitive customers. Even summer, typically the peak money-making season for airlines, is falling short this year, with unsold standard economy seats forcing carriers to cut fares. It dented the second-quarter earnings of Southwest Airlines, the largest U.S. domestic airline. At American, domestic market was the weakest in the second quarter, with its unit revenue declining 6.4% from a year ago. The company's unit revenue in international markets was up, led by a 5% annual jump in the transatlantic market. The U.S. carrier reported an adjusted profit of 95 cents per share for quarter ended June 30, compared with 78 cents a share expected by analysts.
Reuters
an hour ago
- Reuters
UAE developer Arada seeks $500 million Islamic bond as construction booms
DUBAI, July 18 (Reuters) - United Arab Emirates property firm Arada Developments is seeking up to $500 million from an Islamic bond, or sukuk, two sources familiar with the matter said, as it joins other property firms tapping debt markets amid a construction boom in the Gulf state. Sharjah-based Arada would join a slew of Gulf property firms to issue bonds this year, which have tapped debt markets for financing needs and to capitalise on a real estate boom as Gulf countries accelerate economic diversification strategies. Arada plans to launch the bond next week and use funds from the debt sale to acquire new land, the sources said, declining to be named because they were not authorised to speak publicly. The plan was not yet finalised, they said. A spokesperson for Arada did not respond to a Reuters request for comment. Arada last tapped debt markets in September for a $150 million tap of its $400 million sukuk due 2029 which attracted strong demand and offered a yield of more than 7%. In the Middle East and North Africa, issuers raised a record $32.2 billion through sukuk in the six months to June 30, according to LSEG data, defying tariff uncertainty, geopolitical tensions and volatile oil prices. Regional developers which have raised Islamic debt this year include Dubai's Sobha Realty and Omniyat, both raising $500 million in May. Arada was established in 2017 by Sharjah's deputy ruler, Sheikh Sultan bin Ahmed AlQasimi and Prince Khaled bin Alwaleed bin Talal AlSaud, the son of Saudi billionaire Prince Alwaleed Bin Talal. It has projects and assets in its home country, and expects to launch sales and construction in Australia by the end of 2025. The company posted total revenue of $1.1 billion last year, up around 40% from 2023, according to a company presentation.
