Shipping company profits soared 32 times, have sellers become wage earners?

On the evening of July 7, COSCO SHIPPING Holdings released an announcement of expected performance increase in the first half of 2021. According to the announcement, COSCO SHIPPING Holdings expects to achieve a net profit attributable to shareholders of the listed company of approximately RMB 37.093 billion in the first half of the year, and a net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses of RMB 37.021 billion.

Correspondingly, COSCO SHIPPING Holdings' net profit attributable to shareholders of the listed company was about 1.137 billion yuan in the same period last year, and the net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses was 882 million yuan. The company's net profit in the first half of the year is expected to increase by 3162% year-on-year!

Although a nearly 32-fold year-on-year profit increase is rare, the increase in shipping company profits is predictable. After all, there have been constant reports of rising shipping costs since the beginning of the year.

According to statistics, as of July 1, the average global freight rate for 40-foot containers has exceeded four times the level of the same period last year. The freight rate from Shanghai, China to Europe has been rising continuously for the past 10 weeks; and the price of containers from China to the United States has skyrocketed to US$12,000/FEU, US$13,000/FEU, and US$16,000/FEU. Even so, during the reservation process, shippers still need to pay extra to get a space.

It can be said that it is the countless sellers who support half of the shipping companies' profits. In this case, it is not an exaggeration to say that foreign trade companies and sellers have become employees of shipping companies. Some wealthy companies, such as Home Depot, have begun to choose to rent cargo ships to ease the transportation problem. Ordinary sellers can only "sigh in despair".

The performance of COSCO SHIPPING Holdings is also reflected in the stock market. From May last year to now, its stock price has increased more than 10 times, and the industry is generally optimistic about COSCO SHIPPING Holdings' performance in the third quarter.

Based on past experience, the third quarter is the peak season for ocean freight. European and American countries will prepare goods in advance for Christmas holidays and Black Friday and other e-commerce festivals. The trend of rising ocean freight costs has not yet shown signs of stopping. If nothing unexpected happens, COSCO SHIPPING Holdings' profits and stock prices will remain high for a long time, and there is a possibility of rising.

COSCO SHIPPING Holdings

Ocean Freight

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