Sea-Intelligence said there were indications of a weakness in the market in the second half of 2022, which has manifested fully in the first quarter of 2023.

Revenues declined quite sharply, in the range of 35%-70% year on year, while in terms of earnings before interest and taxes (EBIT), there was a stark difference for the first quarter of 2023 versus the previous two years.

Overall, the first quarter of 2023 EBIT was US$7 billion versus a staggering US$43.93 billion in the first quarter of 2022, and even lower than the US$16.28 billion EBIT of 2021-Q1. "That said, it is still markedly higher than the US$621 million EBIT of the first quarter of 2019," pointed out a Sea-Intelligence official.

In fact, the combined EBIT drop year on year was a significant -81% (across the same set of carriers).

This can also be seen in the EBIT/TEU figures, where none of the shipping lines were able to sustain their first quarter of 2022 EBIT/TEU figures into 2023. On average, the shipping lines recorded EBIT/TEU of US$330/TEU in 2023-Q1, down 81% from 2022-Q1’s average of US$1,829/TEU, but still vastly above the just US$53/TEU average of 2010-2021.

"The only silver lining, if you can even call it that, is that while Y/Y comparisons with 2022-Q1 will show a horrifying picture due to the unnaturally high numbers in that year, the reality is that the profitability of the shipping lines has increased considerably compared to the pre-pandemic levels, and looking at the current market indicators, it does not seem that the shipping lines are going to drop back down to those low levels in the short term," commented Alan Murphy, CEO of Sea-Intelligence.

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