A year since the debacle of the Hanjin bankruptcy, the industry is looking a lot rosier, says Drewry research manager Simon Heaney. “In years to come Hanjin’s collapse could be viewed as the watershed moment in the shipping industry’s return to recovery – the event that paved the way to a liner paradise of sustainable profitability – although carriers are not there yet. But he believes that their strategic and swift response to the biggest casualty in their history is beginning to pay off. “The creation of bigger alliances and escalation of M&A activity to consolidate what has always been a highly fragmented sector helped container lines return to the black by the second quarter of this year,” says Heaney. “The degree of profitability will depend on competition which is shrinking – but there are still too many ships and a lot more scheduled to follow.” The question is whether the industry concentration can trump overcapacity. And Drewry believes it could go either way. “We acknowledge that there are many risks that could derail recovery and we believe the strategic changes the industry is making are significant and will allow the biggest and most cost-efficient operators to reap the rewards. “For this year we are forecasting industry operating profit in the region of $6bn and for 2018 we see the sum rising higher still – so the industry will have its most profitable year since 2010.
INSERTION In years to come Hanjin’s collapse could be viewed as the watershed moment in the shipping industry’s return to recovery. – Simon Heaney
