Despite disruptions caused by the Red Sea crisis, the global container shipping industry still achieved a net profit of $9.9 billion in the first quarter of 2025, demonstrating the industry's fundamental stability. However, profitability has declined compared to the previous quarter.

According to the latest "Quarterly Financial Report Analysis of Container Shipping" released by John McCown, industry net profits in the first quarter of this year decreased by 36.4% compared to the fourth quarter of 2024's $15.6 billion. Nevertheless, the profits increased by 82.8% compared to the same period last year, maintaining a high-profit trend that began last year.

The report points out that profit fluctuations in the shipping companies primarily stem from the Red Sea crisis, forcing many shipping companies to divert around the Cape of Good Hope in Africa, resulting in a global effective capacity reduction of approximately 8%. The impact has been most severe on the Asia-Europe route, which represents about a quarter of the total global container shipping distance. The increased distance has led to rising freight rates, but it has also raised operating costs, squeezing some profit margins.

Despite the challenges of route restructuring, the demand for container shipping continues to show robust growth. In the first quarter of 2025, global container throughput increased by 4.5% year-on-year, continuing the growth trend from the previous four consecutive quarters, which were 6.6%, 4.6%, 5.9%, and 7.7%, respectively.

Regarding long-term performance, the profitability of the container shipping industry has significantly improved post-pandemic. McCown noted that between 2016 and 2019, the industry accumulated losses of $8.5 billion with a net profit margin of -1.3%. However, from 2020 to 2024, the industry's net profit margins were 8.1%, 36.8%, 42.7%, 9.6%, and 18.3%, reflecting a fundamental shift in the industry's profitability model.

"While the first quarter of 2025's profit was lower than the 11 quarters during the pandemic peak and the three quarters affected by the Red Sea crisis that pushed up prices, excluding these two special periods, this quarter's net profit still surpasses the performance of any full year in the industry's history," McCown stated in the report. "Similarly, the 12.5% net profit margin in the fourth quarter of 2024 is several times higher than any quarter before the pandemic."

Looking ahead, McCown expects industry profitability to remain under pressure in the second quarter, but the outlook for the second half of the year remains uncertain, with various variables such as geopolitical developments, supply-demand structural adjustments, and freight rate fluctuations that could bring new impacts to the market.