The container shipping industry reported a significant profit increase in the second quarter of 2024. According to John McCown’s quarterly report on liner sector earnings, net income reached $10.2 billion—up from $5.4 billion in the first quarter and 14.7% increase compared to the same period last year.
“This is the second straight quarter of material bottom line increases following the net loss of $0.7 billion in 4Q 2023. Current pricing and volume data is telegraphing that there will be another material increase in net income in 3Q 2024,” McCown notes in the report.
The surge in profits comes after six consecutive quarters of declining earnings since the peak of $63.1 billion during the pandemic surge in Q2 2022. The recent upturn is largely attributed to the Red Sea situation, where missile and drone attacks by the Iranian-backed Houthis have forced ships to reroute around the Cape of Good hope, effectively reducing global capacity by 8%.
The industry has also experienced unprecedented volume growth, with the second quarter seeing a 6.1% increase following an even stronger 8.3% rise in the first quarter. “This is the biggest volume growth experienced since the pandemic and resulted in 2Q24 representing the largest worldwide volume quarter ever,” states McCown.
Meanwhile, Alphaliner reports that average operating margins for leading carriers exceeded 20% in Q2, a level only seen during the COVID-19 pandemic. The average return for carriers rose from 11.4% in Q1 to 21.6% in Q2, according to Alphaliner.