It’s no secret that carriers are raking in massive profits – but the extent of these profits is mouthwatering.
In its latest analysis, maritime consultancy Sea-Intelligence reveals that for the second quarter (Q2) shipping lines' combined Ebit (Earnings Before Interest and Tax) amounted to $41.6 billion – and this excludes CMA CGM, the third-largest carrier, which has so far released a press release but is yet to announce its Ebit.
“This is not only higher than the combined Q2 Ebit of the past 11 years, but is also right at the top with the 2021-Q4 and 2022-Q1 Ebit,” says CEO Alan Murphy. Once CMA CGM’s Ebit is included in the list, 2022-Q2 would likely become the most profitable quarter in the last decade.”
He says, however, that it’s not a value judgement on whether shipping lines making money is good or bad. “It has generally been an unprofitable business for the past decade or so - we are merely pointing out the unprecedented nature of the current market dynamics.”
Figure 1 shows the Ebit/TEU for carriers that publish both their Ebit and their global volumes – but excludes CMA CGM for 2022-Q2.
“The 2022-Q2 Ebit/TEU figure of each of these shipping lines dwarfs each previous year, with the latter hardly relevant in the context of the outsized Ebit/TEU numbers that are evident at present,” he points out.
“These figures are backed by a year-on-year increase in freight rates in 2022-Q2.”
But Murphy believes it’s unlikely that this level of profitability will continue into Q3 due to the fast-falling freight rates, and the slowdown in global demand.
