The latest data shows that the container shipping market continues to perform well, with freight rates remaining at relatively high levels.
In February 2022, China’s container throughput rebounded strongly following the Spring Festival holiday, with both coastal and inland river ports reporting year-over-year increases in throughput. According to statistics, ports nationwide with an annual throughput of 100,000 TEUs or more handled 19.44 million TEUs, a 4.6% increase from the same period last year.
Benefiting from the strong performance of the container shipping industry, CIMC Group, a global leader in container manufacturing, achieved record-breaking results, with revenue reaching 163.7 billion yuan in 2021, a year-on-year increase of 73.85%. Even though the company reported a loss of 2.134 billion yuan in the fourth quarter, CIMC’s net profit attributable to shareholders of the parent company and other equity holders for the full year still reached 6.665 billion yuan, a year-on-year increase of 24.59%, marking the best performance since the company’s inception.
Driven by surging market demand, CIMC’s container production and sales volumes hit record highs, with both revenue and net profit seeing significant year-over-year growth.
A February forecast by industry analysis firm Clarksons noted that both supply and demand growth in the container shipping market will slow to varying degrees this year, with the two trends moving toward balance. However, due to the impacts of the pandemic and congestion, the container shipping market will continue to face tight supply conditions in 2022, and the industry is expected to maintain high profitability levels.
Although the container business performed well, several other businesses within the logistics sector faced varying degrees of decline in net profit. Among them, the road transport vehicle segment experienced a situation where revenue increased but profits did not. This business achieved revenue of 27.648 billion yuan in 2021, a year-on-year increase of 4.34%, but net profit fell by 22.19% year-on-year. Revenue from the airport and logistics equipment, as well as firefighting and rescue equipment businesses, increased year-on-year to 6.842 billion yuan, but net profit was only 193 million yuan, a year-on-year decline of approximately 40%. However, last year, CIMC Group’s logistics services business achieved revenue of 29.471 billion yuan, a year-on-year increase of 177.09%; net profit reached 542 million yuan, a year-on-year increase of 103.91%.
McKinsey & Company, a globally renowned management consulting firm, released a report stating that the global container shipping market may not return to normal until 2024. Furthermore, even if the container shipping market eventually returns to normal, freight rates in 2024 will still be 50% higher than pre-pandemic levels. In the most optimistic scenario, the container shipping market may return to normal in the third quarter of 2022.
Reposted from: China Industrial News