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Carriers' operating margins soar in second quarter

Average operating margins for the main container carriers leapt from 2.6% to
8.5% in the second quarter, as lines benefited from a perfect combination of
low bunker prices and firm rates.
All ten carriers surveyed posted positive operating margins in the quarter, while
results for three of the carriers were in double digits. The average was the high
est since the third quarter of 2010, although the figures are not entirely compa
rable due to the impact of IFRS accounting changes in 2019 and adjustments
in company reporting.
However, the figures show carriers’ core earnings soared in relation to both last
year and Q1 2020. The ten carriers posted an average operating margin of just
1.9% in the same period in 2019.
Individually, EMC (the listed arm of Evergreen Group) recorded the highest op
erating margin in the period, at 12%, while Hapag-Lloyd and Wan Hai also
logged double-digit margins of 11.7% and 10.3%. Maersk, COSCO and CMA
CGM, the three largest carriers, logged margins of 8.3%, 4.6% and 9.3% respec
tively, while Yang Ming came in last at 1.8%.
With volumes in Q2 flat-to-lower than the previous quarter, it demonstrates
again that bunker savings were a key factor to Q2 profits. Combined liftings for
the eight carriers reporting this figure fell by -0.2% in Q2 versus Q1, with only
COSCO Shipholding reporting a significant increase due to the second-quarter
recovery in its Chinese markets.