On July 5, 2024, the Italian forwarders association Fedespedi released its annual economic and financial analysis report on shipping companies, based on 2023 financial statements. The study focuses on the top ten companies in container shipping, though it excludes the largest fleet operator MSC and the French CMA CGM in some instances due to the absence of consolidated financial statements. Fedespedi analysts consider only consolidated financials to ensure consistency and comparability.
The report begins with a general overview. Despite international crises, the global GDP grew by 3.2% in 2023, with a 0.4% decline in international trade. The IMF forecasts a 3.2% GDP growth and a 2.8% increase in international trade for 2024. After a contraction in container traffic in 2022, 2023 saw stability (+0.6%). The first quarter of 2024 registered a 9.2% increase in container volumes compared to the same period in 2023, mainly due to the export growth from Far East countries.
A significant portion of the report details the operational performance of container shipping companies, providing an in-depth view of their capacity and activities. The first point addresses fleet capacity. As of the end of May 2024, the analyzed companies collectively owned 3,813 container ships, representing about 55% of the global total. Their combined fleet capacity was 25.4 million TEUs, covering 85.4% of the global capacity. The average capacity per ship was 6,679 TEUs, reflecting substantial loading capabilities of the operational units.
The text also delves into the details of individual shipping companies, highlighting changes between 2021 and 2024. Overall, fleet capacity increased by 3.8 million TEUs, with the three companies showing the largest increases being MSC (+1.569 million TEUs), which remains firmly at the top of the list in terms of capacity, CMA CGM (+554,000 TEUs), and Hapag-Lloyd (+339,000 TEUs).
Considering the market from the perspective of alliances, the report shows that companies involved in the three major alliances (2M, Ocean Alliance, and THE Alliance) control 81.4% of the total offered capacity and 51.3% of the ships, with an average capacity per ship of around 6,800 TEUs, significantly higher than the average of other companies. It is important to note that the 2M alliance between Maersk and MSC is set to dissolve from January 2025. Maersk will form a new alliance named Gemini Cooperation with Hapag-Lloyd, which will leave THE Alliance. This reorganization of alliances could significantly impact market dynamics and the operational capacity of the involved companies.
The second major aspect of Fedespedi's research concerns the economic and financial performance of the companies. In 2023, a significant revenue decline was recorded for the considered companies, which researchers attribute to decreased handling and a sharp drop in freight rates compared to the previous year. The average freight rate per TEU decreased by over 50% for most companies. The main financial indicators used for the analysis include ROS, ROA, ROE, Quick Ratio, Cash/Debts vs. short-term banks, Bank Debt Ratio, Debts vs. M-L banks/Fixed Investments, EBIT/Financial Charges, Total Financial Debts/EBITDA, and Debt Ratio.
Regarding operational profitability (ROS) - which measures operating income (EBIT) relative to revenue - the decline in freight rates negatively impacted this indicator in 2023, with many companies experiencing a significant reduction in operational profitability compared to 2022. For example, CMA CGM recorded a ROS of 7.7% in 2023, down from previous years, Cosco Shipping Lines reported a ROS of 15.9%, despite an 86% drop in EBIT, and Evergreen achieved a ROS of 13.8%, reflecting an 88.5% reduction in net profit.
Return on Assets (ROA) compares operating income with total assets, assessing a company's ability to remunerate invested capital. A high ROA indicates efficient asset management. However, in 2023, the ROA of shipping companies contracted due to lower freight rates and revenues. CMA CGM's ROA declined due to a significant reduction in operating income, Hapag-Lloyd's ROA decreased parallel to an 85.2% drop in EBIT, and Maersk saw a reduction in ROA in line with an 88.6% decrease in EBIT.
In the first quarter of 2024, economic and financial performance varied significantly among different companies. Some, particularly Asian companies and Zim, managed to increase revenue and final results, recovering from negative situations. Freight rate trends affected per-unit load revenues, which generally decreased compared to the same period in 2023, despite increased transported volumes.
DOWNLOAD THE PDF OF THE ECONOMIC AND FINANCIAL ANALYSIS OF CONTAINER SHIPPING COMPANIES (in Italian)
