Cosco Shipping 1H revenue S$91.0M

Cosco Shipping 1H revenue S$91.0M

Asian container liners are facing a potential drop in profits, according to recent industry insights. A sharp decline in shipping rates is expected later this year as the tariff-driven demand, which pulled forward volumes from the traditional third-quarter peak season, starts to wane.

The US-China tariff truce in the second quarter led to a significant increase in transpacific trade, with freight prices surging in June. However, this temporary boost is expected to subside, potentially triggering deeper rate corrections. Analysts predict that the rest of the year will see weaker trade growth and softer sentiment, further dampening profits.

Japanese liners, such as Mitsui OSK Lines Ltd. and Nippon Yusen KK, have already shown signs of a peak in earnings, with US tariff threats and currency fluctuations impacting their businesses. Chinese peers like Cosco Shipping Holdings Co., on the other hand, may benefit from strong exports and front-loading in the first half of the year, but this boost is expected to peter out as trade slows in China.

The third quarter is set to see a decline in transpacific container traffic, with only a slight seasonal uptick expected in the second quarter of 2026. The container shipping market is fundamentally in a cyclical downturn, driven by temporary rate spikes rather than demand-side strength.

Even tariffs considered favorable could still weigh on rates and volumes, according to Philip Damas, managing director and head of Supply Chain Advisors at Drewry Group. The revised 15% tariff on Japan is still higher than a year ago and is likely to reduce Japanese containerized exports to the US.

Cosco Shipping's 1H revenue of S$91.0M reflects the mixed picture of the industry. While the company benefited from strong exports and front-loading, the outlook for the rest of the year is uncertain, with trade uncertainties and overcapacity expected to weigh on earnings.

Asian container liners are diversifying their routes to mitigate the impact of tariffs. Intra-Asia trade lanes, particularly between China and Southeast Asia, are gaining importance, with China-ASEAN export volumes now double those of China-US. Drewry's Damas expects container lines to cancel more sailings and increase ship demolitions to manage over-supply in the second half of the year.

References:
[1] https://www.bloomberg.com/news/articles/2025-08-05/asian-container-liners-set-for-profit-drop-as-tariff-boom-fades