- Allianz predicts that the shipping sector’s revenue will jump by 19% year over year, and its operating cash flow will grow by 8%.
- It is predicted that container shipping companies would further deleverage in 2022 and 2023.
2022 to set records for container shipping companies, reports Allianz.
The insurer forecasts that the shipping sector’s revenue will leap by 19% year over year, and its operating cash flow will rise by 8%. It said that freight rates are likely to remain lofty in 2023 due to halted delivery of new vessels, new laws on CO2 emissions, scarcities of truck drivers, and increased prices for fuel, containers, and vessels.
The report found that higher cash generation has enabled the industry to adapt to new environmental, social, and governance criteria. With investments growing by 61% year over year in 2021. Additionally, gross debt fell by 5% year over year in 2021.
However, despite increased capital expenditures, Allianz predicted that shipping capacity would not increase as expected. The sector’s current investment efforts have not been in line with its capabilities.
While freight rates have fallen 32% year to date, they are still well above their pre-pandemic average, according to the report. Current freight rates average US$6,400 per 40-foot box, compared to US$1,450 per 40-foot box pre-pandemic.
In addition, while 35% of new ship orders should be delivered in 2023 and 39% in 2024, these new ships are likely to refurbish the fleet rather than fully improve it, as regulations force companies to retire older ships.
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