The Sino-US trade deal has created a perfect storm for the container market, that will further lift carriers’ earnings in the next 2 quarters. The sharp rebound in transpacific cargo bookings have pushed up freight rates over the past week with further rate hikes planned from 1 June. Carriers are scrambling to redeploy their ships to the US to take advantage of the rate bonus with KMTC becoming the latest new entrant on the transpacific.
Charter rates are also enjoying a strong revival as sublet candidates were taken off the market and several short-term charters for Transpacific trips are being negotiated at substantial premiums. Despite the Suez Canal Authority’s efforts, the main line carriers have not redirected their ships back to the Suez route, with the number of ships on the Cape route unchanged since the US-Houthi ceasefire deal was announced on 6 May.
Johnson Leung
Gemini partners continue to underperform in 1Q
Maersk and Hapag-Lloyd remain at the bottom of the carriers’ EBIT margin league table for the 5th consecutive quarter with their operating performance continuing to lag behind all of their main rivals. The 2 Gemini Cooperation partners’ heavy reliance on contract cargo and relatively low exposure on the Transpacific market, coupled with their high operating cost base have continued to weigh down on their financial performance.
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