Shipping container lines are expected to generate record profits.
Eleven container lines are expected to reach $256 billion in profits—$36 billion higher than estimated.
Blue Alpha Capital founder John McCown explained that the jump in profit is due to higher contract rates from the shipping companies.
This year the average shipping contract rate is expected to be $1,900 for a 40-foot container.
Container-shipping prices were 2.84 times higher in the second quarter than they were two years ago, Bloomberg reports.
Unlike many other industries struggling to recover from the pandemic, the shipping industry became a financial success. Even with many economies slowing and shipping difficulties in Russia and Ukraine, the shipping industry’s profits haven’t been greatly reduced.
For example, President Joe Biden signed the Ocean Shipping Reform Act in June. This law stops shipping companies from refusing to allow open cargo space to be filled with U.S. exports as well as charging late fees for slow container shipments.
Though the high prices are positive for those in the shipping industry, high contract rates could reduce transcontinental shipping in other industries.
