skip to main text

Global News Container lines led record transportation revenue growth in 2021

Registration dateNOV 02, 2022

Michael Angell, Associate EditorOct 19, 2022 9:22AM EDT
source : JOC.com (The Journal of Commerce)

Michael Angell, Associate Editor
Oct 19, 2022 9:22AM EDT
source : JOC.com (The Journal of Commerce)

Container lines led record transportation revenue growth in 2021 The Top 50 Global Transportation Providers grew their revenues a record 31.4 percent in 2021, driven by a 76.8 percent gain among the 11 ocean carriers on the list. Photo credit: Shutterstock.com.

Major ocean carriers grew their revenue at more than twice the rate of the overall transportation market in 2021 thanks to strong trans-Pacific shipping demand and record-high freight rates. Flush with cash, ocean carriers are now branching into other markets as container demand wanes..

Annual revenue among the 50 largest global transportation providers grew 31.4 percent to $1.29 trillion in 2021, both all-time highs, according to the latest annual Top 50 Global Transportation Providers study prepared for JOC.com by Pittsburgh-based SJ Consulting Group..

Growth was widespread, with 47 of the Top 50 firms reporting annual gains, but transportation providers with access to large amounts of capacity were in the best position to take advantage of seemingly insatiable shipper demand, said Satish Jindel, president of SJ Consulting.

“Supply chain woes — congestion, shortages of capacity, workers, containers, tractors, and trailers — combined to create the perfect storm for those who have those limited assets to charge a premium,” Jindel told JOC.com. Rising tide That was particularly true for those with access to ocean shipping capacity, Jindel said. The 11 asset-based container carriers on the Top 50 list grew their combined revenue 76.8 percent last year, according to SJ Consulting data. Jindel attributed the gains primarily to the carriers’ exposure to the trans-Pacific market and soaring spot freight rates.

“It was the year of the ocean carrier,” Jindel said.

Six of the container carriers in the rankings more than doubled their 2020 revenues in 2021, although some of them were building from smaller bases.

Taiwan’s Wan Hai Lines and Evergreen Marine grew their top line 193.7 percent and 159.4 percent, respectively, Israel-based ZIM Integrated Shipping Services increased its revenue 168.8 percent, HMM of Korea reported a 119 percent gain, and revenues for Ocean Network Express (ONE) — the merged container operations of Japan’s NYK Line, Mitsui O.S.K. Line, and “K” Line — jumped 109.1 percent year over year. With shippers looking for any available capacity during 2021, Jindel said smaller container carriers that were able to handle the extra spot market freight for large shippers were able to charge a premium for that capacity.

“In normal times, those lines don’t get calls from Walmart or Target or Home Depot,” he explained. “But in this market, the big shippers can pay more than the smaller guys.”

Larger carriers with more exposure to long-term contract rates and less buoyant trade lanes saw more muted gains on a percentage basis, but on an absolute basis, those increases were the largest of any of the Top 50 companies.

China’s Cosco Shipping, for example, saw its annual revenue skyrocket by $26.9 billion (108.4 percent), the largest dollar-value growth of any company in the Top 50 rankings. Denmark-based Maersk and CMA CGM of France weren’t far behind, growing their respective revenues by $21.9 billion (57 percent) and $24.6 billion (78 percent). The only other companies that reported revenue growth in excess of $20 billion were e-commerce giant and third-party logistics provider Amazon (up $22.9 billion) and Germany-based parcel carrier Deutsche Post DHL (up $23.8 billion).

Jindel said Maersk benefited from expanding beyond ocean shipping into landside logistics such as parcel delivery, cold-chain warehouses, and e-commerce. “For Maersk, the rates gave them the ability to make acquisitions that wouldn’t have been feasible otherwise,” he said.

Elevated container rates also trickled down to non-vessel-operating common carriers (NVOs) and forwarders. The 14 companies on the Top 50 list whose primary revenue source is third-party logistics services, which includes Amazon, grew their combined revenue 41.7 percent, but forwarders with more exposure to ocean forwarding reported stronger gains.

Revenues at Kuehne + Nagel, the largest global ocean forwarder by volume, jumped 67.5 percent last year, the largest percentage gain in the 3PL group, while DSV Panalpina and Expeditors International saw revenues rise 66.8 percent and 63.3 percent, respectively. In fact, only four of those 14 forwarders reported volume growth below the average for the Top 50: Bolloré (30.3 percent), Hitachi Transport (20.6 percent), Rhenus (20.3 percent), and Toll Group (13.9 percent).

Other sectors of the global transportation economy saw more limited, but still healthy, growth. With consumers homebound for much of the year, the 11 parcel carriers on the Top 50 list grew their revenue 20.5 percent in 2021. Jindel attributed Deutsche Post DHL’s 44.6 percent revenue gain, the largest in the group, to “strong global trade and e-commerce volumes.”

Fueled in part by volumes related to the distribution of COVID-19 vaccines, United Parcel Service and FedEx, ranked second and third on the Top 50 list, recorded revenue gains of 15 percent and 23.3 percent, respectively.

COVID-19 was also behind weaker results at China State Railways, which saw revenues drop 30.8 percent last year due to the stop-and-start effects of pandemic-related lockdowns, Jindel said. The only other firms in the Top 50 to record annual declines were Russian Railways (down 5.2 percent) and Japan-based parcel carrier Yamato Holdings (down 0.5 percent).
JOC Top 50 Global Transportation Providers Annual revenue from transportation operations, in USD millions JOC Top 50 Global Transportation Providers Annual revenue
· Contact Michael Angell at michael.angell@ihsmarkit.com and follow him on Twitter: @michael_angell.