Drewry has estimated that carrier profits will soar to $300 billion in 2022 as freight rates continue to rise.
In a recent container market update, the maritime consultants said that freight rates, and consequently carrier profits, will continue to surge over the next year as due to several bottlenecks across the global supply chain.
Drewry previously expected carriers to bring in $200 billion in profits for 2022.
One of the largest external factors said to impact business is COVID-19 and China’s zero tolerance policy.
With the current lockdown in Shanghai, the country is facing significant logistic challenges as some offices and depots remain closed until further notice.
“Production outages were mainly confined to the start of the pandemic but now spell bad news for carriers,” said Simon Heaney, Drewry Senior Manager.
The Russia-Ukraine war will also have a large impact on carrier financial results as it drags down global economic growth and container demand.
With these factors and rising bunker costs in mind, freight rates are predicted to rise by a further 39 per cent in 2022.
“More disruption-driven freight rate gains in 2022 should more than compensate for rising costs and deliver even higher profits in 2022, although this forecast is subject to numerous risks,” continued Heaney.
Drewry also revised its forecast for when it believes normalisation will occur in the container market. Based on market intelligence, the organisation now feels supply chains will not return to normal until at least 2023.
While some shipping lines expect port congestion to begin to fade in the second half of 2022, none have estimated when it will end.
Furthermore, as problems continue to mount up at larger ports, such as the LA/LB vessel queue, congestion outside smaller gateways such as Savannah and SC Ports is starting to take shape.