3 Charts Showing Optimism For The Global Shipping Industry
Container shipping companies have not been immune to the disruptive factors roiling markets at the moment, namely rising interest rates, soaring inflation and a potential recession, not to mention war in Eastern Europe.
However, we remain bullish on the global shipping industry for a number of reasons. Below are three charts showing how carriers look to be in positive territory heading into year-end.
Shipping Rates Remain Highly Elevated On A Historical Basis
The equity research team at Goldman Sachs recently released a report highlighting corporate commentary from its annual conference held in London. Companies across the transport, leisure, construction and business services industries attended, with key takeaways focused on the global transport markets, specifically air travel and shipping.
Below is one of the most compelling charts from the bank’s report. Spot rates for containers leaving major Chinese ports are off their peaks from earlier this year as consumers’ spending habits have shifted from goods to services, but there are two things to keep in mind here. Number one, despite the decline, rates are still highly elevated on a historical basis, which we believe could result in shipping companies posting another profitable year. And number two, it appears that rates may be trying to turn up again as we enter the peak summer shipping season.
Shipping Is A Long-Term Growth Story
Similar to other industries, shipping is seeing higher rates of volatility due to sporadic Covid lockdowns, the conflict in Ukraine, surging inflation and other challenges. As a result, shares of container shipping companies have fallen from their March highs.