The strategy of Asian container shipping companies to increase the number of ships they own is paying off, as they are now achieving better profit margins than their European competitors.
Based on the results of the liner shipping companies that disclosed their figures for the first nine months of the year, Asian liner shipping companies performed better than their European competitors as they have fewer chartered ships in their fleets.
Taiwan’s Wan Hai Lines, which has only one chartered ship in its 116-ship fleet, achieved the best result among the liner shipping companies with an EBIT margin (Earnings Before Interest and Taxation) of 25%. In second place was Wan Hai’s compatriot Evergreen Marine Corporation, which owns 69% of its fleet and achieved an EBIT margin of 23%. Cosco Shipping Lines, which owns 76% of its fleet, achieved an EBIT margin of just under 23%.
The French shipping company CMA CGM was the only European shipping company whose EBIT margin was among the five highest. CMA CGM, which owns 70% of its fleet, achieved an EBIT of 15%. In next place was South Korea’s HMM, which owns 85% of its fleet and recorded an EBIT of 12%. Taiwan’s Yang Ming, which owns 54% of its fleet, followed with an EBIT of 10%. ONE, Maersk and Hapag-Lloyd recorded the lowest EBIT margins among the top 10 carriers with 6.3%, 6.2% and 4% respectively. ONE owns 59% of its fleet. Maersk and Hapag-Lloyd, partners in the Gemini Cooperation, own 64% and 60% of their fleets respectively.
Container consultancy firm Linerlytica noted: “Hapag-Lloyd and Maersk remain at the bottom of the EBIT margin rankings among the major listed carriers, trailing their industry peers by up to 20%. The high cost of maintaining the Gemini network’s superior schedule reliability and their inability to achieve a mark-up on freight rates continue to weigh on the operating performance of the two carriers.”
Hapag-Lloyd and Maersk’s Gemini Cooperation was launched in February, but Maersk and Hapag-Lloyd actively chartered vessels in the face of rising rates throughout the year as they did not have sufficient capacity.
In contrast, Wan Hai and Evergreen have the lowest proportion of chartered vessels in their fleets; both carriers have increased their owned fleet through newbuildings and purchases of secondhand vessels to hedge against high charter costs.
