Global Container Shipping Companies Expected to Post Record High Net Profits... Earning as Much as Portugal's GDP This Year

[Photo by AFP Yonhap News]

[Asia Economy Reporter Byunghee Park] This year, the net profits of major global container shipping companies are expected to break record highs again, following last year.

According to Bloomberg News on the 9th (local time), John McCown, founder of the US investment firm Blue Alpha Capital, raised the net profit forecast for 11 major container shipping companies by $36 billion from the previous estimate, presenting it at $256 billion. Analyst McCown stated that the 11 container shipping companies posted a record net profit of $148 billion last year, and it is expected to increase by 73% this year.

The $256 billion is roughly equivalent to the Gross Domestic Product (GDP) of Portugal.

The container ship spot freight rates compiled by UK shipping consultancy Drewry have fallen nearly 30% since the beginning of this year. Spot freight rates refer to one-time or irregular short-term transport contract rates.

However, since spot freight rates had already risen significantly before this year and their share in total container shipping freight rates is not large, the decline in spot rates does not significantly affect the profits of container shipping companies.

Analyst McCown explained that the share of spot freight rates is only about 10%, and most container freight contracts are long-term, lasting more than one year. Therefore, despite the sharp drop in spot rates this year, the overall container shipping freight rates as of the second quarter of this year are 2.84 times higher than two years ago, McCown analyzed. He added that spot rates are 4.72 times higher than two years ago, and long-term contract rates are 2.13 times higher.

The world's largest shipping company, Maersk, announced its quarterly earnings on the 3rd, stating that the average long-term freight rate for a 40-foot container this year is expected to be $1,900. This forecast was raised by $500 compared to when the first-quarter earnings were announced.

Bloomberg reported that as container shipping companies' profits are expected to surge, protests by dockworkers demanding wage increases have been occurring recently in the US and the UK.

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