Despite the impact of the novel coronavirus pandemic on the shipping industry, resulting in supply chain disruptions and high freight rates, many of the world’s largest shipping lines are reporting record earnings.

While ports are swamped with containers, and the number of vessels waiting offshore for berth space to unload is growing, demand for consumer goods continues to soar and companies desperate to sell their products are willing to pay exorbitant freight prices to get their goods on cargo ships.

The global shipping industry is responsible for around 90 per cent of world trade and it’s getting its biggest payday since 2008 — before the global financial crisis caused earnings to tumble the following year.

A P Moller – Maersk, the world’s largest shipper, lifted its forecast for the third time and expects its profits to rise this year to somewhere between 215 per cent and 240 per cent above pre-pandemic levels using earnings before interest, taxes, depreciation, and amortisation (EBITDA) as an imperfect measure of profits.

The Danish group indicated last week that it expected its underlying operating profits to be US$18 billion to US$19 billion, up from a forecast of US$14 billion to US$15.5 billion last month and US$4.3 billion to US$6.3 billion in February.

This would be the highest operating profits in the company’s history, beating the previous record of about US$12 billion in 2008.

Hapag-Lloyd, the fifth-largest shipper in the world, expects an even more dramatic increase. In its most recent earnings report the company projected EBITDA to rise between 815 per cent to 1,025 per cent in 2021, when compared with 2019.

Chinese State-owned COSCO Shipping Holdings said revenues for the first half of the year grew 88 per cent year-on-year to 139.26 billion yuan (US$21.5 billion) while net profits soared to 37.09 billion yuan (US$5.7 billion).

During the first six months of 2021 the company’s container fleet handled 13.84 million twenty-foot equivalent units (TEUs) — a 16.8 per cent increase from a year before.

Revenue for Pacific Basin Shipping, a Hong Kong-based dry bulk carrier, increased 68 per cent for the first half of the year to US$1.14 billion, while net profit rebounded to US$160.1 million from a net loss of US$222.4 million a year before.

While some shipping companies have invested some of their windfall profits into expanding their fleets to meet demand and to decarbonise their fleets, the International Maritime Organisation estimates that shippers will have to invest between US$1.4 trillion and US$1.9 trillion to reduce their carbon emissions to zero by 2050, as companies like Maersk have promised to do.

On the other hand, others are also using much of their profits to increase dividend payments to shareholders.

NYK Line, the world’s second-largest shipper, plans to increase its dividend per share to 1,650 per cent this year over 2019 levels.

Furthermore, in a sign of just how profitable the industry has become, CMA CGM SA — the world’s third-largest carrier — said it is freezing its spot rates to preserve long-term client relationships.

Additionally, Maersk’s CEO Soren Skou said it was “doing everything it could to help customers”. While it was only able to add 5 per cent extra capacity during 2021, it had increased its departures on the transpacific trade — the main bottleneck — from seven a week to 12, he added.

But as CEO of rate-data platform Xeneta, Patrik Berglund commented recently during an interview with FreightWaves, “Yes, this is a cyclical industry… [but] shipping lines now finally know how to make massive amounts of money. Why would they allow overcapacity to happen again?”