Global shippers minting most money since ’08
Container ships, bulkers, car carriers all earning fortunes
The global shipping industry is getting its biggest payday since 2008 as the combination of booming demand for goods and a global supply chain that’s collapsing under the weight of Covid-19 drives freight prices ever higher.
Whether its giant container ships stacked high with of 40-foot steel boxes, bulk carriers whose cavernous holds house thousands of tons of coal, or specialised vessels designed to pack in cars and trucks, earnings are soaring for ships of almost every type.
With the merchant fleet hauling about
80 per cent of world trade, the surge reaches into every corner of the economy. The boom back in 2008 brought with it a huge wave of new vessel orders, but the rally was quickly undone by a demand collapse when a financial crisis triggered the deepest global recession in decades.
This boom’s causes are twofold — an economic reopening after Covid that has spurred surging demand for goods and raw materials. Alongside that, the virus continues to cause disruption in global supply chains, choking up ports and delaying vessels, all of which is limiting how many are available to haul goods across oceans.
That’s left the majority of the shipping sector with bumper earnings in recent months.
The bonanza is centered around container shipping — where rates are spiralling ever higher to new records, but it is by no means limited to it. The shipping industry is posting its strongest daily earnings since 2008, according to Clarkson Research Services Ltd., part of the world’s biggest shipbroker. The only laggards are the oil and gas tanker markets, where more bearish forces are at play.
“I’m not really sure the perfect storm covers it —this is just spectacular,” said Peter Sand, chief shipping analyst at trade group Bimco. “It’s a perfect spillover of a redhot container shipping market to some of the other sectors.”
Container shipping remains the star. It now costs $14,287 to haul a 40foot steel box from China to Europe. That’s up more than 500 per cent on a year earlier and is pushing up the cost of transport everything from toys to bicycles to coffee.
Those gains are already showing in the earnings of AP Mollermaersk A/S, the world’s largest container line, which hiked its estimated profits this year by almost $5 billion last month.
An economic reopening after Covid has spurred surging demand for goods and raw materials. Also, the virus continues to choke up ports and delay vessels, all of which is limiting how many are available to haul goods across oceans