The container shipping sector begins to decline from epidemic highs

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Last Updated on October 4, 2022 by Bitfinsider

For the third time this year, Maersk, one of the largest companies in the container shipping sector, has increased its annual profit estimates.

It increased its underlying operating profit expectation for the entire year from around US$24 billion to US$31 billion.

Independent marine research firm Drewry predicts that this year’s operating profit for the whole sector will be US$270 billion, more than ten times the profit of US$26 billion in 2020.

The sector has experienced a boom over the last two years, driven by rising demand for masks and other personal protective equipment as well as consumer expenditure during the COVID-19 pandemic.

The industry is anticipated to be declining from its highs as the pandemic’s impact appears to be wearing off.

Even the normally busy August to October period, during which merchants transfer items in preparation for the year-end shopping season, looks to have decreased.

According to DHL CEO John Pearson, the sector anticipates a more mild peak season, depending in part on how China’s zero-COVID strategy pans out and how the energy crisis develops.

Singapore’s Logistics and Supply Chain Management Society’s president, Mr. Raymon Krishnan, reported that Trans-Pacific eastbound rates have fallen below US$5,000 per container. A container cost between $15,000 and $20,000 last year.

Twenty Equipment Unit, or TEU, stands for a 20-foot container.

The spot tariff for the benchmark route between Asia and the US, according to the Drewry consultancy, dropped to little under $5,000 per 40-foot container, the first time the index has fallen below that barrier since December 2020.

However, the rate is still twice what it was before the pandemic.

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