Global Shipping Companies' Profits Reach 'Highest' Since 2008

Shipping Company Daily Profit Trend [Image Source= Bloomberg]

[Asia Economy Reporter Park Byung-hee] Bloomberg reported on the 12th (local time) that the profits of global shipping companies are at their highest level since 2008.

According to the UK shipping consulting firm Clarkson, shipping companies earned $37,400 per day in August. This is the highest since July 2008, when they earned $44,800 per day.

The daily profits of shipping companies were only $13,300 in August last year. However, as demand, which had contracted due to COVID-19, rapidly recovered, shipping company profits have surged. Freight rates for most vessels, except tankers and gas carriers, have soared due to the demand recovery. In particular, container ships are leading the freight rate increase.

Currently, the freight rate to transport a 40-foot container from China to Europe reaches $14,287. This amount has risen by more than 500% compared to a year ago.

France's CMA CGM, the world's third-largest container company, issued a statement on the 9th saying it will not raise freight rates further until February next year out of consideration for its customers. This means they are already making enough profit to afford such a gesture for their customers.

The ongoing supply chain disruptions caused by COVID-19 are also a background factor for the rise in shipping freight rates. Due to the spread of COVID-19, unloading operations at some ports have been disrupted, causing delays in product supply.

Bloomberg, citing port officials, reported that as of the 10th, 54 vessels were anchored offshore waiting to enter the ports of Los Angeles (LA) and Long Beach in California, USA. This is 14 more vessels than two weeks ago, indicating that supply chain disruptions are still ongoing, Bloomberg reported. According to the LA port, the average time for a vessel to enter the port has increased from 7.6 days at the end of August to 8.5 days currently.

Alexandra Alatari, an analyst at the UK’s major ship brokerage firm Arrow Shipbroking Group, said, "Container ship freight rates are at an absurd level, and bulk ship freight rates are the same," adding, "Given the current conditions, these freight rates could continue into next year."

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