Operational Environment

In 2018, various geopolitical, economic and legislative events impacted the logistics market in Containerships’ area of operation. Nevertheless, there were no changes in the operating environment dramatically affecting the Group’s activities or performance in 2018.

Oil prices impact the logistics sector in various ways. In 2018, cargo levels balanced, but the sharp increase in bunker prices during the last quarter of 2017 increased Group’s operating expenses. At the same time, Russia and Libya, two markets important for the Group, are expected to see economic growth in the future as the price of oil rises.

The Russian import ban continues to have an impact, particularly on cargo flow from Europe to Russia. When the ban entered into force in 2014, Containerships successfully changed its strategy in the Russian market and replaced grocery cargoes with other cargoes and increased cargo flow from Russia to Europe. In 2018, Russian exports continued to increase.

Some markets in North Africa are exposed to political and economic insecurity. For instance, growing insecurity in the Group’s important market – Libya – has increased handling times in ports. Political unrest in Turkey has not yet impacted the Group’s freight volumes.

In June 2016, the United Kingdom voted to withdraw from the European Union. Brexit did not have an impact on cargo volumes in 2018. In the future, the UK’s withdrawal from the EU may cause a decrease in cargo flows to the UK. However, on the other hand, it may strengthen the country’s exports.