Container demand growth is losing some momentum amid mounting headwinds, but carriers will continue to rake huge profits, according to Drewry’s latest Container Forecaster report.
The analyst forecasts that ocean carriers will have a third year of 15 percent-plus annual growth in total revenue in 2022, with sales expected to exceed USD500 billion next year for the first time. It believes that the third quarter of 2021 probably represents the peak quarterly earnings for carriers, but quarterly results in 2022 will stay on a more even keel that will average out slightly higher; it expects the container shipping industry to achieve a combined EBIT of USD200 billion this year.
“The smoother earnings forecast rationale stems from a pivot away from the volatile (and likely retreating) spot market towards longer-term contracts that are expected to be signed at much higher levels in upcoming negotiations,” said the analyst.
This revenue and profit growth will come despite a slowing growth in port throughput. Fast rising inflation, ongoing supply chain bottlenecks and the Omicron Covid-19 variant are conspiring to slow the pace of growth in container handling, encouraging Drewry to lower its outlook for world port throughput in 2022 to 4.6 percent, down from 5.2 percent in its previous forecast.