Global shipping companies will see more orders from China in the coming months as the COVID-19 situation eases in Shanghai while continuing to adopt new tactics to compete with each other, said analysts and business executives on Wednesday.
As a surge in COVID-19 cases forced a lockdown in April and May in Shanghai－the world’s largest container port by throughput capacity－and also because of logistics delays resulting from highway controls in parts of China, the metropolis suffered from a breakdown in the logistics supply chain.
Many foreign container ships didn’t choose ports in Shanghai to call in during that period.
Even though it will take some time for shipping and port businesses to return to normal in Shanghai, there are huge amounts of pent-up demand, both from factories resuming work and their urgent need for exporting products overseas after the delay, said Zhou Zhicheng, a researcher at the Beijing-based China Federation of Logistics and Purchasing.
Thanks to growing shipping demand and rising freight, the profit growth of global shipping companies, such as France’s CMA CGM SA, Denmark’s Maersk Group, and Geneva-based Mediterranean Shipping Co SA, has soared significantly since 2020, he said.
For instance, CMA CGM’s operating profit jumped 69.9 percent on a yearly basis to $8.87 billion in the first quarter, while Maersk doubled its net profit to $9.1 billion, according to their latest financial reports.
Revenue for the full year is expected to continue to be strong as the increase in freight rates on its long-term contract portfolio will add approximately $10 billion in revenue in 2022 compared to 2021, Maersk said in a recent statement.