MAJOR shipping lines recorded a combined second-quarter EBIT (Earnings Before Interest and Tax) of US$41.6 billion, without taking into account the EBIT of French shipping giant CMA CGM, according to a Sea-Intelligence report.
"This is not only higher than the combined Q2 EBIT of the past 11 years but is also right at the top with the 2021-Q4 and 2022-Q1 EBIT," said Alan Murphy, CEO, Sea-Intelligence.
"Once CMA CGM's EBIT is included in the list, 2022-Q2 would likely become the most profitable quarter in the last decade. CMA CGM who have only issued a press release so far, which does not list their EBIT.
"We should stress that we do not mean this as a value judgement on whether shipping lines making money is a good or a bad thing, and we note it has generally been an unprofitable business for the past decade or so; we are merely pointing out the unprecedented nature of the current market dynamics," Mr Murphy added.
The report said that the 2022-Q2 EBIT/TEU figure of each of these shipping lines dwarfs each of the previous years, with the latter hardly relevant in context of the outsized EBIT/TEU numbers. These figures are backed by a year-on-year increase in freight rates in 2022-Q2.
Mr Murphy pointed out that "this level of profitability, however, might not continue into Q3, due to the fast-falling freight rates, and the slowdown in global demand".