Following what it describes as “meteoric” third-quarter spot rate increases, maritime consultancy Drewry has upgraded its guidance for industry-wide operating profit in 2020 to $11 billion, in its latest Container Forecaster report.
This is up from the $9.2bn forecast in the June edition and would represent the industry’s most profitable year since 2010 (c. $20 bn).
It warns, however, that while the outlook is more optimistic than three months ago, a second-wave outbreak could shatter the fragile economic recovery, with consequential impact on global port handling.
Commenting on their less-than-accurate outlook, the analysts say that they misread the addiction of Western nations to consumption.
“We assumed wrongly that populations, fearing long-term job security, would hunker down and limit non-essential purchases. It discounted the resourcefulness of human spirit when faced with adversity and, perhaps more tellingly, the untapped potential of e-commerce.”
Restocking inventories and fast forwarding some orders due to second wave fears have also seen volumes swell.
Shipping lines meanwhile have controlled capacity more tightly than in previous crises and were able to secure very high load factors, very high rates and lower costs – hence the positive outcomes.
“Some carriers say that they have “learnt a lesson” during the Covid-19 crisis about how to manage their business in times of volatile demand. This could have long-term repercussions on carrier resilience and profitability in what is normally a cyclical, boom-and-bust business.”