Shipping Industry to Continue Record-Breaking Performance in Second Half of the Year

[Asia Economy Reporter Dongwoo Lee] As the shipping industry recorded its highest-ever performance in the second quarter, it is expected to continue strong results in the third quarter, which marks the seasonal peak season.

According to the shipping industry on the 16th, HMM, the largest domestic deep-sea container shipping company, posted sales of 2.9067 trillion KRW and an operating profit of 1.3889 trillion KRW in the second quarter of this year, surpassing the previous record operating profit of 1.0193 trillion KRW in the first quarter. The total sales for the first half of this year reached 5.3347 trillion KRW, up 98.4% compared to the same period last year, and operating profit rose 1661.6% to 2.4082 trillion KRW during the same period.

HMM analyzed that container loading volume increased by about 8.4% year-on-year due to increased cargo volume, and especially the freight rates on Asia-US routes rose, along with increases on all routes including Europe and other regions, significantly improving market conditions.

The Shanghai Containerized Freight Index (SCFI), a representative indicator showing the level of container sea freight rates, has risen for 14 consecutive weeks, setting new record highs every week. The SCFI, which aggregates freight rates for 15 container shipping routes, stood at 4281.53 as of the 13th, up 55.67 points from the previous week.

In particular, the freight rates on the major US East Coast routes for domestic exporters rose the most in one week, increasing by 285 USD per 1 FEU (12-meter container) to 10,452 USD compared to the previous week, while the US West Coast route also recorded 5,744 USD per FEU, up 189 USD.

This strong freight rate trend is expected to continue for the time being as the second half of the year approaches the traditional peak cargo seasons such as Black Friday and Thanksgiving in the US. According to financial information provider FnGuide, HMM's sales for the third quarter of this year are estimated to reach 3.1095 trillion KRW, an 81% increase compared to the same period last year, and operating profit is expected to surge 451.3% to 1.5275 trillion KRW.

Pan Ocean, the largest domestic bulk carrier, also posted strong results with sales of 1.1299 trillion KRW and operating profit of 112 billion KRW in the second quarter. This is the first time in 13 years since the fourth quarter of 2008 (120 billion KRW) that Pan Ocean's operating profit has exceeded 100 billion KRW. The market outlook for Pan Ocean's third-quarter operating profit is around 132 billion KRW.

A shipping industry official said, "As the COVID-19 situation prolongs, congestion continues at major ports such as the US West Coast and East Asia," adding, "If cargo volume surges again in the second half of this year as it did last year, container ship freight rates could increase further."

This content was produced with the assistance of AI translation services.