ISRAELI flag carrier Zim Integrated Shipping Services has seen its business improve across the board since the start of the Red Sea crisis, reports MarketBeat, of Sioux Falls, South Dakota.
What was meant to hurt Israel-based shipping companies like Zim has created a windfall that continues as a tailwind as long as ships avoid the Suez Canal, which accounts for 15 per cent of the world's shipping cargo volume.
Zim shares staged a strong rally on its second-quarter 2024 earnings report but has since seen shares pull back as much as 33 per cent from the $23.76 triple top.
Despite the challenges posed By the Red Sea conflict, Zim has demonstrated resilience and adaptability. The company's ability to navigate these turbulent waters is a testament to its strength and strategic foresight.
The Shanghai Container Freight Index (SCFI) surged to 3,187 by June 7, up from 1,757 on April 12. However, rates have been steadily falling as it closed at 2,511 on September 13, 2024.
Normalization may be setting in despite the tense situation in the Red Sea. Potential chances for a ceasefire don't seem likely in the near term.
While further escalation in the Red Sea could lift freight rates again, there is also another situation that could spike rates.
The International Longshoremen's Association (ILA) is the largest maritime workers union in North America. The contract between the ILA and the United States Maritime Alliance (USMA) is set to expire on September 30. Failing a new contract, the ILA is set to go on strike on October 1.
To date, neither side has even sat down for formal master contract negotiations in since the last one was called off on June 11, 2024. The last strike occurred in 2002, causing west coast ports to close for 11 days, causing $1 billion a day in losses, which took six months to recover from.
Said Zim CEO Eli Glickman: 'During the quarter, we benefitted from Zim's strategic decision to increase the Company's spot market exposure in the transpacific trade. This has enabled us to capture a significant upside in a rate environment that has been elevated for longer than anticipated.
We expect our results in the second half of 2024 to be better than the first half, driven by continued supply pressure from the Red Sea crisis, combined with current favourable demand trends,' Mr Glickman said.
SeaNews Turkey
What was meant to hurt Israel-based shipping companies like Zim has created a windfall that continues as a tailwind as long as ships avoid the Suez Canal, which accounts for 15 per cent of the world's shipping cargo volume.
Zim shares staged a strong rally on its second-quarter 2024 earnings report but has since seen shares pull back as much as 33 per cent from the $23.76 triple top.
Despite the challenges posed By the Red Sea conflict, Zim has demonstrated resilience and adaptability. The company's ability to navigate these turbulent waters is a testament to its strength and strategic foresight.
The Shanghai Container Freight Index (SCFI) surged to 3,187 by June 7, up from 1,757 on April 12. However, rates have been steadily falling as it closed at 2,511 on September 13, 2024.
Normalization may be setting in despite the tense situation in the Red Sea. Potential chances for a ceasefire don't seem likely in the near term.
While further escalation in the Red Sea could lift freight rates again, there is also another situation that could spike rates.
The International Longshoremen's Association (ILA) is the largest maritime workers union in North America. The contract between the ILA and the United States Maritime Alliance (USMA) is set to expire on September 30. Failing a new contract, the ILA is set to go on strike on October 1.
To date, neither side has even sat down for formal master contract negotiations in since the last one was called off on June 11, 2024. The last strike occurred in 2002, causing west coast ports to close for 11 days, causing $1 billion a day in losses, which took six months to recover from.
Said Zim CEO Eli Glickman: 'During the quarter, we benefitted from Zim's strategic decision to increase the Company's spot market exposure in the transpacific trade. This has enabled us to capture a significant upside in a rate environment that has been elevated for longer than anticipated.
We expect our results in the second half of 2024 to be better than the first half, driven by continued supply pressure from the Red Sea crisis, combined with current favourable demand trends,' Mr Glickman said.
SeaNews Turkey