Cosco Shipping Reports Highest Profit in 12 Years
What’s new: Cosco Shipping Holdings Co. Ltd. (601919.SH) reported its 2020 profit jumped 46.8% to 9.93 billion yuan ($1.5 billion), according to its annual report filed to the Shanghai Stock Exchange on Monday. Meanwhile, its revenue climbed 13.4% to 171.3 billion yuan.
Last year’s take marked the highest profit the company has reported in 12 years, thanks to a spike in logistics prices in the second half of 2020 that compensated in part for the slumping demand in shipments in the first half due to the Covid-19 pandemic.
What’s the background: Most of the world’s major shipping lines sharply reduced their routes in the first half of 2020 as demand evaporated due to Covid-19, leaving the amount of idle capacity at a record high at the end of May. Prices began to rise at that time, prompting companies to gradually put capacity back on line starting in the third quarter. The spiking shipping rates even forced governments in China and the U.S. to step in.
Cosco Shipping has deployed 40 more ships with nearly 200,000 containers since May to meet the demand, increasing its total capacity by 7%.
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