The McCown Container Results Observer noted that the result marked more than a threefold improvement over the same quarter last year, a record at the time.
Profitability also increased, with net income representing 45.1% of revenue compared to 25.2% in the first and 41.8% in the final quarter of 2021.
“By any and all financial measures, the 1Q22 results were the best actual quarterly performance by the container shipping industry in its history,” said the report.
Beneath the record profit figures, Container Trade Statistics data showed worldwide box volume falling 1.8% in the first quarter, adding to a 1.1% drop in Q4 2021 and 1.2% drop in Q3 2021.
A previous edition of the McCown report noted that container line profits in the third quarter of 2021 had exceeded those of the tech giants. The box sector continued to outperform Facebook, Amazon, Netflix and google, in Q1 2022 and even extended its lead as the tech companies experienced their usual seasonal Q1 dip in profits, and the container sector’s seasonal low failed to materialise.
The container sector has benefited from the fallout of the COVID pandemic, as a change in consumer habits in the West conspired with closures of ports and factories to disrupt supply chains. The interruption to the flow of equipment and vessels continues to effectively restrict transportation supply on many routes, leading the freight market higher. Effective capacity is still restricted by around 13%.
The McCown report noted that the highest profit margins were at those companies serving the Asia-Europe and Asia-North America routes, along with companies that had capacity to take on new business in recent quarters.
Looking ahead, McCown said that increased revenues have a long tail as most containers are moved under medium- and long-term contracts. Even if spot rates were to ease, earnings would take longer to fall.
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