RECORD PROFITS FOR 2021

According to shipping consultants Drewry, the container shipping sector is heading for record profits for this year and probably, 2022  is also expected to be highly profitable. The total 2020 figures for all liner show the industry  achieved some $26.6bn operating profit, the highest figure ever recorded by the UK analysts, with a combined operating margin of 13%.  It is also expected that port congestion and container equipment shortages will remain a feature throughout most of 2021, but this should ease towards the end of the year.. The situation will further restrict the availability of capacity and lead to substantially higher average spot and contract freight rates.

Liners are widely expected to report  outstanding results for Q1. For example, Cosco Shipping, the world’s third largest liner, said last week it expected this year’s first quarter net profit to total RMB15.41bn ($2.3bn),  up from the $44m for the first three months of 2020.

The higher contracts rates being locked in, another highly profitable year is virtually guaranteed and  the industry will re-set profitability records once again in 2021, despite indications of possible higher fuel cost and charter rates..For 2022, Drewry anticipates some easing of freight rates as carriers will lose the inflationary impact caused by the current supply chain disruption. The benefits of the high rates during the pandemic  will disappear but demand remains high. The rate situation  is likely to continue into 2022 and it is apparent that the liner companies are also backing these freight rates to continue for quite some time.”