![]() ![]() A bad sign for the demand side of Container Shipping. ![]() In times of surging energy costs, the average consumer will reduce unnecessary spending. I'm receiving red flags left and right: investors are bailing out, housing construction is weakening significantly because of cancellations, cosmetic repairs on cars are being postponed, and commercial businesses have too much inventory because they expected supply chain disruptions to last and ordered multiples of their usual stock in 2021 and early 2022 (maybe an additional explanation for the previous shipping craze). Two of them have companies related to the housing sector (architect and electrician), and one is self-employed in the automobile business. Many of my relatives have their own businesses. Given the macroeconomic circumstances (further reading: The Next Pivot Will Create A Fiat Crisis), I expect that volumes are the next shoe to drop because of demand destruction.Ī qualitative argument: I work in a tax office in Germany and have direct connections to middle-class clients operating commercial businesses. Bunker rates remained somewhat sticky, and freight volumes are peaking. The new leases ZIM entered will increase their average cost per TEU progressively. In the future, the operating leverage from which ZIM benefitted is not only going to disappear but is likely to reverse towards the negative. Q2 2022 Investor Presentation (ZIM Investor Relations) It's pretty clear that we've seen the peak of earnings and margins during the first half of 2022. ZIM went from barely breaking even in early 2020 to profit margins of 40-50% in late 2021 and early 2022. The operating leverage created an insane spike in earnings during 20. During the runup, ZIM profited from surging Freight Rates, but their Charters were still on contracts from previous times. The average Charter Rates went up parallel to Freight Rates. Additionally, the vast majority of their 149 vessels are chartered in from Containership Lessors. They are heavily exposed to swings in Container Freight Rates. ZIM is a Container Liner that aggressively operates in the Container Shipping market. The FBX (Freightos Baltic Index) fell from $9,200 FEU to $3,500 per FEU during the same time.įreightos Baltic Index () How does this affect ZIM? The WCI (World Container Index) fell from $ 8,000 per 40ft container (FEU) to $3,500 per FEU as of this week.ĭrewry World Container Index (.uk) During the same time, global Container Freight Rates fell off a cliff. Since I published my last article on ZIM Integrated Shipping Services ( NYSE: ZIM) the stock plunged by 62%. ![]() Lindsay_imagery/E+ via Getty Images Freight Rates are rolling over ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |