Carrier earnings have peaked but will still top $200bn in 2022, according to Drewry’s latest Container Forecaster report.
The figure is even higher than an upgraded forecast of $190bn that the analyst expects the industry earn in 2021.
Drewry has significantly upgraded its forecast of Ebit profits for 2021 from an earlier estimate of $150bn. That followed an exceptional third quarter last year during which earnings for carriers “probably peaked”.
But the analyst expects that quarterly results in 2022 will stay on a more even keel that will average out slightly higher.
It attributes that to “a pivot away from the volatile [and likely retreating] spot market towards longer-term contracts”.
These are expected to be signed at much higher levels in upcoming negotiations, the analyst said.
A separate report by HSBC Global Research predicts that 2022 will be more profitable than 2021 due to strong contract rates.
It adds that the global container shipping sector is on track to make an operating profit of more than $163bn in 2022, up 8% year-on-year.
The Hong Kong-based research body attributes that to the "strong tailwinds in contract rates". It said these have been fuelled by a 77% increase in spot rates in the past 12 months.
HSBC notes that shippers and liners are entering into contract negotiations earlier than before.
Citing figures from analytics platform Xeneta, the analyst expects head-haul long-term rates from Asia to Europe and the US to double or triple from those set last January.
Long-term contracts signed in the past three months from Asia to the US East Coast have gone from $3 700 per 40-foot equivalent unit (feu) in January 2021 to $7,000 this year, according to Xeneta.
HSBC added that it expects the first half of 2022 to mirror the stronger second half of last year.
It said factors that could grow profitability include an extension of China’s ‘zero-Covid’ policy and disruption in the US West Coast ports caused by upcoming wage negotiations.
Drewry expects that ocean carriers will ride a third year where annual revenues are growing at more than 15% per year.
It forecasts that carrier sales will exceed $500bn next year for the first time.
Any material dent in demand — such as a shift in consumer spending back to services —could put pressure on spot rates and eventually profits, the analyst says.
It added that fast rising inflation, ongoing supply chain bottlenecks and the Omicron Covid-19 variant are already slowing the pace of growth in container handling.
That will result in lowered world port throughput in 2022 of 4.6% growth, down from 5.2%.
