Container Shipping Profits Soar Driven by Red Sea Crisis
The container shipping industry had a notable recovery in the third quarter of 2024, recording net profits of $26.8 billion, a 164% increase from the previous quarter, according to analyst John McCown.
This rebound, which reverses a six-quarter decline from the peak of $63.1 billion in the second quarter of 2022, has been driven by capacity constraints in the Red Sea region and strong global demand. Compared to the third quarter of 2023, profits increased by 856%, equivalent to an additional $24 billion.
McCown attributes this recovery to pricing dynamics related to the Red Sea crisis, a key route that represents 25% of global container traffic. “The recent increase is mainly due to price hikes triggered by the disruptions in the Red Sea,” McCown noted in his report.
However, performance varies among operators. Although the top 11 companies recorded annual growth in their profits, eight reported decreases over the last twelve months compared to previous periods. European carriers, which operate in more diversified markets and routes, showed the largest variations.
Global container volumes also increased by 4.7% year-on-year in the third quarter, the fourth largest quarterly increase in three years. The record volume of TEUs (Twenty-Foot Equivalent Units) loaded in the third quarter, at 47.1 million, exceeded pandemic peaks by 2.1%.
Cumulative figures for 2024 show a 6.3% increase in volume compared to 2023, reaching 136.7 million TEUs, even surpassing 2021 pandemic records by 1.5%.
Although the third quarter appears to mark a peak in the current cycle, geopolitical tensions and market shifts suggest the industry’s financial outlook will remain volatile in the near future.
