Seatrade Maritime: Carrier profits collapse amid market tensions

Drewry Maritime Financial Research Services (DMFR) projects a nosedive in Earnings Before Interest and Taxes (EBIT) for the top container lines as over-capacity and waning demand catch carriers in a doom loop.

A projected decline of nearly 15%, from $75bn full-year EBIT projected at the beginning of 2025, nearly quadrupled as carriers were forecast to top just $32bn in EBIT by the end of the year. Further falls are forecast during 2026.

Vessel deliveries this year, in an already saturated container shipping market, will see income collapse further, by more than 96.7% year-on-year, said DMFR.

“The possibility of a full resumption of Suez transits and a rapidly evolving geopolitical situation could place additional pressure on freight rates,” said a DMFR statement.

According to Drewry’s Financial Health Check of 2026, released on 2 February, over-capacity and geopolitical uncertainty, has led to “rising debt to finance a large orderbook and softening demand growth[, which] are expected to weigh on container shipping’s financial health in 2026”.

Ocean Network Express’s Q3 results highlight some of the challenges facing the carriers. On the headhaul legs out of Asia to North America and Europe. ONE had transported 678,000 teu eastbound to the US, down 35,000 teu on Q3 2024, but utilisation was maintained at 90%.

Spot rates peaked at $2,647/feu on 6 November and declined to $2,481 by 25 December, before there was a sudden spike taking freight rates to $3,132/feu in the first week of January 2026. From there, average spot rates declined rapidly to $2,442/feu by the end of the month.

On the Asia to Europe trades, container liftings increased 26,000 teu year-on-year to 444,000 teu in Q3 2025 but vessel utilisation in the third quarter last year was down to 81%, down 12% from a year earlier. That saw average spot rates on the trade fall to $1,577/feu in early October, recovering to $2,840/feu by the first week in January, but as with the Pacific trade, rates have recorded a steep decline to $2,379.

Neither the European nor the US consumer markets achieved the pre-Chinese New Year rush expected, and with new deliveries on the way and the New Year lull lasting until 3 March, Q4 will likely be challenging for carriers.

ONE recorded an $88m loss in Q3 and a $371m profit for the first half of the year. To achieve its projected profit of $310m, ONE is forecasting a $27m profit in Q4; with rates declining in January, and little chance of a recovery this month, the carrier will need to do a lot of heavy lifting to return a profit in March.

There will be fewer vessels delivered during 2026 than in the previous two years, nevertheless, Drewry’s senior consultant on supply chains, Stijn Rubens, confirmed: “Our outlook is pretty grim, in terms of over-capacity. It used to be the case that carriers were able to shift surplus capacity to the north/south trades, and that’s exactly what they’ve been doing over the last 12 months, so they’re already saturated now and the rates are coming down already.”

As a result, said Rubens, there is no longer an option to redeploy vessels into these trades after the Lunar New Year and up to the start of the June peak season for rates to recover.