The container shipping industry is experiencing a boom in profitability, with liner operators’ operating margins for the first quarter (Q1) of 2024 reaching their highest point since 2010, excluding the exceptional surge witnessed during the COVID-19 pandemic. This news comes from a report by Alphaliner.
The healthy margins are attributed to capacity shortages created by diversions due to the Red Sea crisis. These disruptions pushed freight rates up by an average of 27% compared to the previous quarter. The combined margin for the nine largest operators reached a staggering 11.4%, a significant turnaround from the negative 3.8% recorded in the fourth quarter of 2023 – the first negative result for the industry in five years.
South Korean shipping giant HMM emerged as the top performer, boasting a margin of 18.1%. This exceptional performance is linked to the fact that a majority (75%) of their fleet operates on ex-Far East trade routes, which experienced the most significant rate hikes. While the COVID-19 boom might not be replicated, the container liner industry is currently enjoying a period of substantial profitability.
Source: The Container News