Recently, the global container shipping market is undergoing a rare “war for space.”
“There are customers, but there is no space.” “European and American routes are all full of space.” “The East China region of the U.S. line is more serious about space explosion, and cargo continues to be dumped.” The reporter learned from a number of freight forwarders and shipping companies that due to multiple factors such as geopolitical conflicts, route detours, and the surge in demand for stocking in traditional peak seasons, many international trunk routes have experienced serious space explosions, and freight rates have soared.
This industry change caused by the contraction of the supply side is bringing definite investment opportunities to the A-share market.
1. News core: Geographical conflicts have triggered a transport capacity crisis, and high freight rates may continue until July
The trigger for this wave of “exploded cabins” in the container shipping market points directly to the ongoing geopolitical tensions in the Middle East.
Safety risks in the Red Sea lanes have forced a large number of ships to bypass the Cape of Good Hope, and navigation uncertainty in the Strait of Hormuz is also increasing.
The substantial detour of routes directly led to a decrease in ship turnover efficiency and a sharp reduction in effective transport capacity.
At the same time, the demand for replenishment in major consumer markets such as Europe and the United States coupled with the arrival of the traditional freight peak season has sharply worsened the contradiction between supply and demand for space.
Data show that freight rates on the Red Sea route have soared by 40% to 50% compared with the same period last month, and European route futures prices have also increased by 44% since mid-April.
Faced with the situation of “it is hard to find a cabin”, shipping companies have announced that the European line freight rates will increase by 30%-60% in June.
It is generally judged in the industry that the tight capacity situation caused by the obstruction of the waterway will be difficult to alleviate in the short term, and the phenomenon of high freight prices and cabin explosion will continue for at least 1-2 months.
Although freight demand on European and American lines may diverge after July, shipping companies will be in a significant “seller’s market” for at least the next quarter.
2. A-share mapping: Four main lines capture the dividends of the “maritime boom”
The popularity of the shipping market is being transmitted upward along the industrial chain, bringing strong impetus to the performance growth of A-share-related listed companies.
Investors can focus on the following four main lines:
1. Container shipping leader: the most elastic performance
The most direct beneficiary of rising freight rates is undoubtedly the container liner company.
For every 10% increase in freight rates, the net profit elasticity of leading companies can reach more than 20%.
– COSCO Shipping Holdings (601919): As the world’s fourth largest container shipping company, its route network covers the world and has a deep presence on core routes with severe tank capacity such as Asia, Europe and the Americas.
The company’s fleet exceeds 300 ships and will fully enjoy the increased profits brought about by this surge in freight rates.
– China Grain Flow (603565): A leading enterprise in domestic domestic trade container transportation.
In the context of tight foreign trade shipping capacity, some cargo may be diverted to domestic trade. In addition, the company’s own small ship resources are scarce, and the company’s performance is relatively flexible.
– Jinjiang Shipping (601083): Deeply engaged in Northeast Asia and Southeast Asia routes.
After the main routes between Asia and Europe are detoured, these regional routes have become important alternative channels. The company is expected to benefit from the growth in regional trade volume and the increase in freight rates.
– Ningbo Ocean Shipping (601022): As a shipping company in Zhejiang Province, it has obvious advantages in the route from the Yangtze River Delta to Southeast Asia, and can quickly allocate transportation capacity to meet the alternative demand for routes with full capacity.
2. Core port hub: both throughput and rates increase
The explosion of cargo spaces and rising freight rates will stimulate cargo owners to ship goods in advance and seize space, directly increasing the container throughput of the port.
At the same time, busy port operations will also help stabilize or even increase rates.
– SIPG (600018): The world’s largest port in terms of container throughput, it is the core node of the international shipping network.
The explosion of cabins on the European and American lines will significantly drive the growth of Shanghai Port’s cargo throughput.
– Ningbo Port (601018): The global cargo throughput champion, container throughput ranks among the top three in the world.
Its deep-water port and automated terminal advantages allow it to efficiently handle the incremental cargo brought about by route changes.
– Qingdao Port (601298): An important foreign trade hub port in northern my country, it has direct shipping advantages in the Middle East and Red Sea routes, and is expected to handle more transfer containers caused by waterway problems.
3. Container manufacturing and leasing: the next link in demand transmission
Tight shipping capacity and declining ship turnover rates will lead to longer transit times for containers and fewer empty containers available on the market, thus creating demand for new containers and leased containers.
– CIMC (000039): The absolute leader in global container manufacturing, with a market share of over 50%.
The recovery in container demand will directly drive orders and prices for the company’s dry container business.
– COSCO Shipping Corporation Limited (601866): The world’s leading container leasing company, with huge container assets.
Rising freight rates are usually accompanied by simultaneous increases in container rentals, and the company’s leasing business revenue is expected to grow.
4. Cross-border logistics and freight forwarding services: improved bargaining power
In the case of extremely scarce shipping spaces, the service value of cross-border logistics and freight forwarding companies with stable channels and transportation resources is highlighted, their bargaining power is enhanced, and their gross profit margin is expected to improve.
– Jiayou International (603871): cross-border multimodal transport service provider.
When the shipping time limit is extended due to detours, some high-value, time-sensitive commodities may be diverted to land transportation channels such as China-Europe trains, and the company’s related businesses are expected to benefit.
– Haicheng Bangda (603836): A comprehensive cross-border logistics service provider, providing one-stop services such as ocean freight forwarding, customs declaration, and warehousing.
In the cycle of rising freight rates, its service fee income will also rise accordingly.
In summary, the “sweet period” of this round of container shipping market is driven by hard constraints on the supply side such as geopolitics, and has strong short-term certainty.
Investors can follow the transmission path of “rising freight rates → surge in profits of shipping companies → busy port throughput → recovery in container demand → premium logistics services” to lay out leading companies in each link.
Of course, we also need to be alert to risks that may reverse the industry trend, such as the unexpected relaxation of the geopolitical situation and the concentrated delivery of new ships.
But at least until midsummer comes, the “heat” in the shipping sector will probably continue.
