Container Shipping Industry Expected to Remain Profitable Despite Downturn

The container shipping industry experienced a second straight earnings downturn in the fourth quarter of 2022, with net income reaching $34.7 billion, according to John McCown’s latest Container Shipping Sector Quarterly Financial Results report.

This represents a 33.9% decrease from the same quarter in 2021 and a 41.1% decrease sequentially from 3Q22.

The decrease follows seven consecutive quarters of record net income for the sector, peaking in the second quarter of 2022.

In his report, McCown highlights the impressive margins achieved by the container shipping industry during the pandemic. The industry’s net income to revenue margin for 4Q22 was 33.3%, which is 2.5 times higher than the overall margin of FANG (Facebook, Amazon, Netflix, Google), and 1.2 times higher than the combined margin of Apple and Microsoft, according to McCown.

While McCown anticipates that the industry’s profit margins will continue to decline in the coming quarters, he estimates that the industry is expected to remain profitable, with estimated net income for 2023 at $43.2 billion. However, this estimate represents an 80% decrease from the staggering $215 billion earned in 2022.