Based on Hapag-Lloyd’s substantial financial data as a market proxy, Sea-Intelligence has estimated that carrier cost inflation is 29 per cent greater than before the pandemic.
Sea Intelligence has also noted that all aspects of the world economy have suffered increasing inflation, but that this is gradually abating.
Cost inflation peaked in 2022-Q3, when total unit cost was 64 per cent more than before the epidemic.
However, this is being addressed from the carriers’ perspective, since cost inflation has already been cut in half (compared to the peak) in 2022-Q2 to 29 per cent.
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Alan Murphy, CEO of Sea-Intelligence, said: “If we look at the underlying cost elements, handling and haulage and seen to have been the least affected by inflation, as the unit costs presently are 11.2 per cent above 2019 levels, whereas the costs to personnel are up by 51 per cent compared to before the pandemic.
“But of course, each of these cost components do not have the same impact. Personnel expenses only account for 7 per cent of the total operating expenses and is the smallest component. Conversely, Handling and Haulage account for 37 per cent and is the largest component.”
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The next largest component, with a 30 per cent share of total operating expenditures – vessels (excluding bunker), which also includes depreciation, amortisation, and impairments – increased by 38.9 per cent over the previous year.
According to Sea-Intelligence, this category saw one of the smaller declines from the pinnacle, of 16.2 per cent.
