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Container shipping set for third most profitable year ever, Alphaliner reports

The global container shipping industry is poised to make 2024 its third most profitable year in history, despite rising costs driven by geopolitical tensions and regulatory changes, according to figures shared by Alphaliner on LinkedIn.

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In a remarkable display of resilience, the global container shipping industry is poised to record its third most profitable year in 2024, according to an analysis shared by maritime intelligence firm Alphaliner on Wednesday.

Despite significant challenges posed by geopolitical tensions and increased operational costs, leading carriers have demonstrated extraordinary financial performance. As the figures by Alphaliner show, net profits for top shipping companies have already surpassed the full-year results of both 2020 and 2023, placing 2024 in a distinguished position of profitability.

The ongoing hostilities in the Middle East have necessitated substantial route modifications, compelling carriers to divert vessels around the Cape of Good Hope. According to Alphaliner, this strategic rerouting has precipitated a near 20% increase in ton-miles year-on-year, consequently elevating expenses across multiple operational categories.

Danish shipping giant Maersk provides a compelling case study in navigating these complex conditions. The company has experienced a 23% year-on-year surge in bunker costs, directly attributable to ship re-routing. Alphaliner’s data reveals that Maersk burned 8.5 million tonnes of fuel in the first nine months of 2024, representing a 16% increase compared to the same period in 2023.

Adding to the financial complexity, the introduction of the EU Emissions Trading System (ETS) on 1 January has introduced an additional layer of expense. Maersk, for instance, has already allocated nearly $130 million towards carbon offsets in 2024 – a cost entirely absent from the previous year’s financial landscape.

Despite these mounting expenses, the shipping industry remains remarkably robust. Alphaliner’s analysis suggests that 2024 will stand as a testament to the sector’s adaptability, positioning itself as the third most profitable year in liner shipping history, trailing only the exceptional pandemic years of 2021 and 2022.

As global trade continues to navigate uncertain waters, the resilience of container carriers offers a compelling narrative of strategic adaptation and financial tenacity.

Financial guidance upgraded for key players

The financial statements of leading shipping carriers reveal a robust and optimistic industry landscape, with each major player demonstrating significant growth and improved financial projections.

Maersk: Consolidated EBITDA increases to USD 4.8 billion

Maersk has emerged as a standout performer in the third quarter of 2024. The company’s consolidated revenue soared to USD 15.8 billion, a substantial increase from USD 12.1 billion in the same period last year. Consolidated EBITDA witnessed a remarkable jump, reaching USD 4.8 billion compared to just USD 1.9 billion in the previous year.

The Danish shipping giant has revised its full-year guidance upwards, now anticipating an underlying EBITDA between USD 11.0 and 11.5 billion – a significant upgrade from its previous forecast of USD 9.0 to 11.0 billion. Free cash flow projections have also been raised, with expectations now set at USD 3.0 billion or higher.

While maintaining its capital expenditure forecasts at USD 8.0 to 9.0 billion for 2023-2024 and USD 10.0 to 11.0 billion for 2024-2025, Maersk cautioned that performance remains subject to macroeconomic uncertainties. The company noted that a USD 100 fluctuation in container freight rates could impact EBIT by approximately USD 0.3 billion.

Hapag-Lloyd: EBITDA guidance raised to USD 5 billion

Hapag-Lloyd has similarly demonstrated strong performance, upgrading its 2024 earnings forecast. The company achieved EBITDA of approximately USD 3.6 billion in the first nine months of the year, prompting a revision of its full-year expectations to between USD 4.6 and 5.0 billion – a marked improvement from its previous forecast of USD 3.5 to 4.6 billion.

The company acknowledged increased costs due to vessel rerouting around the Cape of Good Hope, but highlighted strong demand and tight capacity as key drivers of its financial performance. A company spokesman noted the challenges of longer transport times and the need for additional capacity.

Ocean Network Express (ONE): 65% revenue growth and USD 1,999 million profit

ONE reported particularly impressive figures for the second quarter of fiscal year 2024. The company saw a 65% year-on-year revenue increase, reaching USD 5,864 million. Net profit surged to USD 1,999 million, representing a year-on-year increase of USD 1,812 million.

CEO Jeremy Nixon highlighted the strong performance in Asia-North America and Asia-Europe trades, driven by consistent consumer demand and an early peak season. The company has revised its full-year net profit guidance upwards to USD 3,095 million from its previous projection of USD 2,745 million.

Despite acknowledging potential uncertainties – including geopolitical situations and upcoming US elections – ONE remains optimistic, with plans to launch a new Premier Alliance East-West network from January.

This financial snapshot underscores Alphaliner’s earlier assessment: the global shipping industry is not just surviving, but thriving in the face of significant challenges.

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