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Box lines’ first-quarter margins the best since 2010, bar Covid-boom

Liner operators’ operating margins for 1Q 2024 have reached the highest since 2010, excluding the period during the Covid-induced boom, according to Alphaliner’s report.

Average operating margins for the container industry surged back into the black as capacity shortages created by the Red Sea diversions pushed freight rates up by an average of 27% versus 4Q 2023.

The aggregate margin for the nine largest operators reached 11.4%, a significant turnaround from the negative 3.8% recorded in 4Q 2023 (the first negative result for the industry in five years).

Covid-19 aside, the margins were the best seen since 2010, when governments, anxious to heal the effects of the 2008 global financial crisis, initiated stimulus programmes.

Carriers’ average rates rose between 14% and 48% in Q1 2024, versus the previous quarter, driven by large gains out of China.

Margin-wise, HMM was the best performer, with an operating margin of 18.1%. The South Korean flagship carrier, which operates a leading 75% of its fleet on ex-Far East trades, recorded the highest increase in rates, which rose 48% quarter-on-quarter to an average of US$1,350 per TEU.

Maersk Line was at the bottom of the rankings for the second consecutive quarter, and the only major carrier to report a negative margin. The Danish carrier incurred an operating loss of US$161 million, on a margin of negative 2%. While Maersk Line saw average freight income up by 23% per TEU, its volumes dipped 6% from 4Q 2023.

ONE and ZIM Line also enjoyed higher freight revenue, which increased by 19% and 32%, respectively, from 4Q 2023. However, their relatively high proportion of chartered tonnage ate into their earnings, resulting in margins of 6% and 11%, respectively.

Alphaliner said, “Carriers are now significantly more bullish for 2024 than at the start of the year. Maersk increased the bottom line of its EBIT guidance, while for the first time Hapag-Lloyd and ZIM ruled out the possibility of losses over the full year, and instead are on track to post some of the industry’s best returns outside of the pandemic in the short-term.”


Martina Li
Asia Correspondent





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