Carriers’ profits fall 90 per cent to $3.2 billion in Q2 2023

Carrier profits fell 90 per cent to $3.2 billion in Q2 2023

According to the latest analysis from Sea-Intelligence, the shipping market is seemingly shifting into a post-pandemic normality as carriers have faced yet another setback to their profits.

While Q4 2022 gave people a first glimpse into what this might look like, Q1 2023 was the first quarter where the carriers’ operating profits took a real hit, reported Sea-Intelligence.

This continued into Q2 2023, with the combined EBIT dropping by 90 per cent YoY to a little over $3 billion.

Further to that, Sea-Intelligence recorded an operating loss for both ZIM and Wan Hai. While ZIM has had profitability issues in past Q2’s, this was a first for Wan Hai in 11 years.

READ: Blank sailings reach post-pandemic low

© Sea-Intelligence

Figure 1 depicts the EBIT/TEU of the shipping lines that publish both their EBIT and their global transported volumes.

As seen in the graph, none of these shipping lines were able to maintain their EBIT/TEU figures in 2023, with the largest Q2 2023 EBIT/TEU recorded by OOCL of 305 USD/TEU.

READ: Carriers’ profits fall 81 per cent to $7 billion

In contrast, Sea-Intelligence found the smallest EBIT/TEU in Q2 2022 was 1,377 USD/TEU. Maersk (207 USD/TEU), Hapag-Lloyd (298 USD/TEU), and ONE (137 USD/TEU) all recorded EBIT/TEU within a much narrower range of 130-300 USD/TEU.

In all of this, ZIM recorded a negative EBIT/TEU of -195 USD/TEU as it lost $195 for every TEU that they moved in Q2 2023.

READ: Transpacific blank sailings increase

Alan Murphy, CEO of Sea-Intelligence, stated: “A large reason for the decline in profitability is the decrease in the freight rates, which dropped by 48 per cent to 67 per cent across the shipping lines that publish these figures.

“Another reason is the decline in transported volumes. What is surprising however, is that ZIM, one of the only two shipping lines to record an EBIT loss, grew their volumes 0.5 per cent globally, and by roughly 13 per cent on both Transpacific and Asia-Europe.”

Recently, Sea-Intelligence reported annualised growth rate of loaded imports recommenced compared to the pre-pandemic year 2019, with an average of 2.7 per cent during the second quarter of 2023.

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