In the fourth quarter more shipping companies will fall into the red

Alphaliner's assessment of earnings before interest and tax (EBIT) for the nine largest companies showed that the average operating margin fell to 1.5 percent in the third quarter, lower than recorded in any quarter in 2019.

At the top of the list was Cosco (including OOIL) with an EBIT margin of 15.8 per cent, a result Alphaliner said was "helped by a comprehensive cost reduction programme which reduced expenditure". Cosco's performance was in line with peers, with revenues down 60 per cent, but unlike some of its rivals, the group posted flat revenue growth over the period.

At the bottom of the list was Israeli shipping company Zim, which posted an adjusted EBIT loss of $213 million despite taking a hefty impairment charge of $2.1 billion in the quarter and a cumulative EBIT loss of $373 million in the first three quarters.

Alphaliner said Estar had been "hammered by its high exposure to the spot market" while at the same time committing to expensive charter rates for its fleet. "With 95 per cent of Zim's fleet capacity made up of charters, which is the highest in the industry, and most carriers typically operating a more balanced fleet of owned and chartered vessels, Estar will continue to work to address the issue of fixed rates signed during the pandemic," Alphaliner said.

For example, Estar's current charter of 6,644 TEU super-Panamax sister ships Zim Vietnam and Zim America will expire in March 2025, and under the charter, the carrier will pay a daily charter rate of $53,000 to Costamare, a non-operating container ship owner.

Compared to the current charter market, for example, CMA CGM has just leased the 6892TEU Buxcoast container ship for six months at $25,000 per day.Estar has 34 "expensive" charters due to be rehanded back to owners next year, followed by about 40 vessels whose leases expire in 2025, during which it will receive 46 new long-term charters, 28 of which will be powered by LNG.

Meanwhile, Alphaliner's third-quarter freight growth ranking was topped by HMM in South Korea, which saw an 11 per cent year-on-year increase, followed by ONE in Japan with a 7 per cent increase, and then Maersk and Hapag-Lloyd, which both saw a 5 per cent increase in volumes.

Cosco was at the bottom of the growth rankings, with a zero increase in its capacity, behind CMA CGM ships, which only increased their capacity by 1 per cent during the period.

CMA CGM no longer reports its results at the EBIT level and is therefore not included in Alphaliner's operating margin rankings.

However, the French shipping company has the second highest earnings before interest, tax, depreciation and amortisation (EBITDA), with a margin of 21 per cent, behind Evergreen Shipping, which had an EBITDA of 26.3 per cent in the quarter.The outlook for the liner industry remains bleak. "Based on full-year earnings forecasts, several currently profitable shipping lines have now confirmed possible losses for the fourth quarter," Alphaliner said.