Q2 2023 Carrier Gross Earnings Down by 90% to US$3.2 Billion

Q2 2023 Carrier Gross Earnings Down by 90% to US$3.2 Billion

Market appears to be shifting into a post-pandemic normality

After two very profitable years for the shipping lines, the market is shifting into a post-pandemic normality. While 2022-Q4 gave us a first glimpse into what this might look like, 2023-Q1 was the first quarter where the carriers’ operating profits took a real hit.

This continued into 2023-Q2, with the combined EBIT dropping by -90% Y/Y to a little over US$3 billion. Further to that, both ZIM and Wan Hai once again recorded an operating loss. While ZIM has had profitability issues in past Q2’s, this was a first for Wan Hai in 2012-2023.

Sea Intelligence

The figure above shows the EBIT/TEU of the shipping lines that publish both their EBIT and their global transported volumes.

None of these shipping lines were able to sustain their EBIT/TEU figures in 2023, with the largest 2023-Q2 EBIT/TEU recorded by OOCL of 305 US$/TEU. In contrast, the smallest EBIT/TEU in 2022-Q2 was 1,377 US$/TEU.

Maersk (207 US$/TEU), Hapag-Lloyd (298 US$/TEU), and ONE (137 US$/TEU) all recorded EBIT/TEU within a much narrower range of 130-300 US$/TEU. In all of this, ZIM recorded a negative EBIT/TEU of -195 US$/TEU. Basically, they lost US$195 for every TEU that they moved in 2023-Q2.

A large reason for the decline in profitability is the decrease in the freight rates, which dropped by -48% to -67% across the shipping lines that publish these figures.

Another reason is the decline in transported volumes. What is surprising however, is that ZIM, one of the only two shipping lines to record an EBIT loss, grew their volumes 0.5% globally, and by roughly 13% on both Transpacific and Asia-Europe.

Read More: Reefer Shipping Remains Resilient Despite 2022 Trade Contraction

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Transport and Logistics ME