According to a new report from John McCown, Blue Alpha Capital, second quarter results for global shipping are the highest ever in shipping history. Seven individual container shipping companies posted second-quarter net profit that beat UPS, still the world’s most profitable shipping company.
The combined net income of UPS, Fedex, Union Pacific and JB Hunt in the second quarter was $5.5 billion, or just 8.6% of container shipping industry revenue. Collectively, the net profit on revenue margin of these major US shipping companies was 9.2% in the second quarter of 2022, barely one-fifth of the actual container shipping margin.
Comparing the liners with the FANG quartet – namely tech giants Facebook, Amazon, Netflix and Google – also highlights the rarefied atmosphere that container shipping has entered over the past year.
Container shipping industry profits were 14% higher than FANG’s total profits in the fourth quarter of last year, 103% higher than FANG’s first quarter profits and 145% higher in the second quarter. In addition, the container shipping industry’s net profit to revenue margin of 46.1% in the second quarter was four times higher than FANG’s overall margin and still nearly double if the low margin of Amazon is excluded.