Despite recording losses in the first quarter of this year, the container shipping industry is set for a turn-around in the second quarter which would lead to an eventual solid operating profit of about US$1.5 billion for the year.
This according to the latest Container Forecaster by maritime analyst Drewry, pointing out that higher rates and fast-growing demand in the second quarter would soon show on container carriers’ bottom lines.
“While we were expecting better for the first three months, our profit forecast already built in that the market recovery would only really push on from the second quarter onwards when new contracts roll over. Therefore, despite the disappointing start to 2017, we see no reason to downgrade our profit guidance and will most probably raise it for the next Container Forecaster,” said a Drewry spokesperson.
He added that “exceptionally strong" demand growth in Q1 2017, and far higher annual contract rates, would create even more profitable conditions for the remainder of the year than had been envisioned.
This view appears to be shared by the major carriers. For example, when publishing its first-quarter results earlier this month, Maersk Line CEO Søren Skou conceded that his company was dissatisfied with the performance, but said he expected that the shipping line would deliver a $1-billion improvement over 2016. Skou added that rates (both spot and contract) were gaining traction throughout the quarter, including on the more troublesome North-South routes.
