| SHIPPING FINANCE |
Liner shipping forecast to make $43.2bn profit in 2023
A usually reliable source of container financial forecasts has made a call on 2023 fortunes for the liner industry, suggesting this year could be the third-best combined annual results in the history of the sector.
John McCown, whose Blue Alpha Capital quarterly liner profit reports have become essential reading during box shipping’s record earnings run since 2020, has forecast liner shipping will make a combined net income this year of $43.2bn on revenues of $327.bn. While this would mark an 80% drop over last year’s record profits, it would still prove to be another sensational year of earnings, helping to explain carriers’ continued amassing of tonnage in the first three months of 2023.
“I suspect many will think my number is too high and few will think it is too low,” McCown stated in his latest quarterly earnings report.
The earnings before interest and taxes (EBIT) liner shipping made in the three years – 2020, 2021 and 2022 – are more than the combined profits of the previous 63-year history of container shipping, according to analysis by Sea-Intelligence.
Analysts remain divided on liner profitability in 2023, a year which has started with many doom and gloom headlines.
UK consultants Drewry estimated in Splash’s annual container forecast report published at the start of the year that the sector would make a profit of $15bn this year.
According to analysis from investment bank Jefferies, rates show signs of stabilising. The Shanghai Containerized Freight Index (SCFI) gained week-over-week on Friday from 908 to 923, its biggest gain in nominal terms since June 2022 and the 1.7% gain is its largest since December 2021.
The China Containerized Freight Index (CCFI), which includes spot and contracts, was down 1.9% last week, bringing its year-to-date decline to 24.6%.
Source: Splash247