Due to the persistent weakness in freight rates, Japan's big three shipping companies Nippon Yusen Kabushiki Kaisha (NYK Line), Kawasaki Kisen Kaisha (K Line) and Mitsui O.S.K. Lines (MOL) lowered their full year outlook as they posted first quarter earnings.

Nippon Yusen Kaisha (NYK) suffered the worst hit as the company reported a loss of JPY12.78bn (USD123.1m) in the first quarter, compared to a profit of JPY43.06bn seen in the same period a year ago.

NYK's revenue declined to JPY470.7bn in the quarter, from JPY588.7bn a year earlier, while its operation income plunged from JPY17.4bn to an operating loss of JPY10.9bn for the respective periods.

The company estimated that its full year loss would hit JPY15bn, against the previously estimated profit of JPY15bn.

NYK said that the container shipping market was extremely sluggish as growth in freight rates stalled due to an oversupply of tonnage, while the dry bulk shipping market also witnessed challenging operating conditions "as the lingering gap between supply and demand did not narrow significantly despite the scrapping of aging vessels."

Oversupply of all types of vessels grew markedly worse in the liquid transport market as a result of new deliveries of ships, NYK added.

The company's compatriot Kawasaki Kisen Kaisha (K Line) also closed the first quarter in the red. Namely, K Line reported a loss ofJPY 26.79bn (USD258.2m), against a profit of JPY10.1bn seen in the same period in 2015.

The company's revenues for the three-month period stood at JPY244.59bn, down from JPY335.45bn, in part attributed to low levels of dry bulk freight rates and a slumping containership freight rate market in its Asia-North America service.

What's more, K Line's operating income dropped from JPY11.2bn to an operating loss of JPY14.8bn.

Unlike its counterparts, Mitsui O.S.K. Lines (MOL) posted a profitable first quarter as it recorded a profit of JPY1.4bn in the period, down from JPY12.8bn seen in the same quarter a year earlier.

The company's revenues for the period stood at JPY360bn, against the JPY449.4bn booked in the first quarter of the previous fiscal year.

MOL said that the very large crude carrier (VLCC) market saw an upward pressure from time to time, but the decrease in cargo volume from the seasonal drop off in demand led to the market following a weakening trend since the beginning of the year.

Although the improvements in the supply and demand environment on Asia-Europe and Asia-South America routes facilitated a recovery in the containership sport freight rates, the market continued to be difficult overall, MOL added.

The shipping line predicts that its profit for the fiscal year ending March 31, 2017 will reach JPY15bn.