Ocean Carriers Profit fall 90% to $3.2 Billion in Second Quarter of 2023

Ocean Carriers Profit fall 90% to $3.2 Billion in Second Quarter of 2023

Ocean carriers appear to be moving to a post-Covid normality that challenges profitability.

Although the fourth quarter of 2022 provided signs of this, the first quarter of 2023 marked the actual impact on carrier profits, according to the same report from research, analysis and data services firm Sea-Intelligence.

This trend persisted into the second quarter of 2023, with the combined EBIT plummeting 90 per cent year over year, amounting to slightly over US$3 billion.

Additionally, Sea Intelligence documented operational deficits for both Zim and Wan Hai. While Zim has encountered profitability issues in previous second quarters, this represents the first such occurrence for Wan Hai in over 11 years.

“A large reason for the decline in profitability is the decrease in the freight rates, which dropped 48 to 67 percent across the shipping lines that publish these figures, said Sea-Intelligence CEO Alan Murphy.

“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 per cent globally, and by roughly 13 per cent on both transpacific and Asia-Europe”.

Given sluggish economic performance and outlook, the drop is not unexpected and industry pundits are expecting carriers to start looking at more aggressive ways to maintain profitability. Many carriers are already trying to impose GRI’s and there are always snippets of news and information around slow-steaming, fleet renewal, mothballing vessels and blank sailings.