the demand for shipping containers is rising

What Does Rising Profits in Container Shipping Sector Mean?

It seems more commonplace to hear accounts of financial recovery and continued prosperity coming from both established and emerging markets all over the world. This kind of improved economic performance is reassuring to analysts, and gives investors the added confidence they need to pursue investment in foreign marketplaces and business opportunities abroad.

Although rebuilding the international economy has taken some time, the strengthening of industries and infrastructure through investment and improved operational efficiency over the last 7 years, has created a number of profitable investing options for investors and corporations alike. In particular, the investment-community is benefiting from opportunities that invest in the world’s economic growth, and maintain the momentum of prosperity that has powered world trade, for nearly a decade.

The investment community is benefiting from opportunities that invest in global economic growth Click To Tweet

Make no mistake, the shipping industry has its critics who routinely challenge the industry’s profitability. Many focus their argument on passing challenges like over-capacity, rate drops and lack of port/infrastructure investing to accommodate the sector’s growth. But, the truth about shipping investments is that it is not only the container ships that are getting bigger, container shipping line profits are too. 2013 and 2014 financial results provide us with some great examples.

In the third-quarter of 2014 Maersk Line recorded a profit of USD $685 million (USD $554 million) and CMA CGM has seen their profits rise by as much as 60 percent in a single quarter. Container lines are not the only ones enjoying prosperity. The GCC had a remarkable year in 2014 as well, with companies like DP World emerging as a fine example of a challenging region that is benefiting from the growth in world trade. Even Drewry says container shipping profits will improve in 2015 and is looking very favorably on the coming year.

Container lines are not the only ones enjoying prosperity. Ports and terminals are profitable too Click To Tweet

All of these rising profits tell me three things. One, over-capacity does not affect demand. Two, shipping ports and operators are making investments into infrastructure and improvements, and three; container freight rates will continue to climb through out 2015. All of this begins to point to an appealing investment opportunity that has the potential to deliver a great investing experience to the investment community.