Chinese Shipping Firms Forecast Profits as Freight Rates Hit Two-Year High

Cosco Shipping Holdings Co. and other major Chinese container liners are anticipating a substantial earnings windfall as global freight rates hit a two-year high. Rates peaked at $4,639 per 40-foot container in early July, fueled by shipping disruptions in the Strait of Hormuz and the Red Sea, alongside a rush by exporters to move goods before U.S. tariff changes take effect.

To maximize efficiency and lower fuel costs caused by diverting ships around Africa, some carriers, including Cosco, have resumed sailings through the Red Sea despite persistent security risks. This trend follows strong earnings growth already recorded by Taiwanese peers Evergreen Marine Corp. and Yang Ming Marine Transport Corp., as well as increased financial guidance from European carriers A.P. Moller-Maersk A/S and Hapag-Lloyd.

While current demand is supported by inventory restocking in Western economies, the financial outlook remains uncertain. Analysts warn that the potential expiration of the U.S.-China trade truce in October could create new financial pressures for Chinese shipping operators.