Seatrade Maritime News: Container Shipping Rakes in About $63.7B Q2 Profits With No Signs of Imminent Collapse

Sep 08, 2022

(Image Source: Nippon Cargo)

The latest edition of the McCown Container Report generalizes data from the second quarter of 2018 for the entire industry, based on the performance of publicly traded container lines. Q2 is expected to bring in $63.7 billion, which is $123% greater than Q2 2021's $28.6 billion and $5 billion higher than Q1 this year. It is the seventh consecutive quarter of record profitability for a sector that has battled to generate a profit for the better part of the past two decades.

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Blue Alpha Capital founder John McCown has increased his full-year earnings projection for the industry from $220.5 billion to $245 billion as the profitability metrics continue to grow. Estimates for 2022 are 65% higher at $245 billion, compared to 2021's $148 billion.

The question of whether or whether the profit levels for container shipping have peaked, and the steepness of the fall-off that will occur, is becoming increasingly pressing in light of forecasts of declining global container volumes, dropping spot prices, and fleet expansion.

McCown predicts a second-half profit of $122.6 billion, up very little from H1's $122.4 billion, based on a $245 billion prediction for 2022 as a whole, with Q3 likely to be on par with or slightly better than Q2.

According to McCown, "worry about the impact of the orderbook is overstated when the shape of new capacity is considered," and much of the financial outcomes for 2022 have already been baked in. "Spot-rate believers who are forecasting the end of corporate profits are relying too heavily on narrative rather than data, and they will be shown to be inaccurate. We may be at or near the high, but there is no imminent earnings collapse".

Source: Container shipping record $63.7bn Q2 profits, no collapse imminent says report

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