jwesth @jwesth: "𝘼 𝙨𝙩𝙧𝙤𝙣𝙜 𝙧𝙚𝙗𝙤𝙪𝙣𝙙 𝙞𝙣 𝙛𝙧𝙚𝙞𝙜𝙝𝙩..."

United Kingdom

Edited

𝘼 𝙨𝙩𝙧𝙤𝙣𝙜 𝙧𝙚𝙗𝙤𝙪𝙣𝙙 𝙞𝙣 𝙛𝙧𝙚𝙞𝙜𝙝𝙩 𝙧𝙖𝙩𝙚𝙨 𝙨𝙪𝙥𝙥𝙤𝙧𝙩𝙨 𝙈𝙖𝙚𝙧𝙨𝙠 🚢 Surge in container freight rates, with the composite index increasing 15% over the last week. The busy trade route between Shanghai and Rotterdam is up 20%. Today, it will cost you c. $5.000 to send a 40-foot container from China to Europe. 📈 For investors, this brings back profitable memories from 2022, when freight rates were 5x normal levels, resulting in wild profits among shipping companies. $MAERSKB.CO (A P Moller Maersk) had exceptionally high earnings in 2022, resulting in an extraordinary dividend of 4.300 DKK (a dividend yield of over 25%). 🏴‍☠️ The conflict in the Red Sea that started back in December has lifted freight rates. With the vessels now sailing south of Africa rather than through the Red Sea, the journey from Asia to Europa is approximately ten days longer, removing container capacity in the market. This has mitigated some of the overcapacity in the otherwise highly competitive market and allowed shipping companies to charge higher prices in a market where they otherwise are price takers. 🌊 But we are still far from a 2022 scenario. While the Red Sea conflict has temporarily boosted freight rates, future freight rates remain uncertain. This temporary situation could be overtaken by the general overcapacity that already exists in the container market. Many new container vessels will enter the market in the third and fourth quarters. Maritime research firm Drewry anticipates a significant industry overcapacity of up to 25% during 2024, which eventually could revert freight rates from their current elevated levels. $DSV.CO (DSV A/S) $ZIM (ZIM Shipping Services Ltd) $HLAG.DE (Hapag-Lloyd) $KNIN.ZU (Kuehne & Nagel International AG) $UPS (United Parcel Service Inc) $DHL.DE (Deutsche Post AG) $MAERSKB.CO

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