As the exchange rate rises (won weakness) and maritime freight rates remain strong, the shipping industry is expected to perform well this year. Last year, as maritime freight rates soared, shipping companies achieved record results. The shipping industry reports that there are many upward factors for maritime freight rates this year, such as the second term of the Trump administration in the United States and strikes by East Coast port labor unions.
According to the shipping industry on the 8th, the Shanghai Container Freight Index (SCFI), a global benchmark for container ship freight rates, rose by more than 44.83 points to 2,505.17 points as of the 3rd. This is the first time the SCFI has exceeded the 2,500 mark in three months since Sept. 13 of last year.
Typically, the shipping industry regards the SCFI at the 1,000 level as the breakeven point. Since November 2023, maritime freight rates have surged due to geopolitical risks in the Middle East, with levels significantly exceeding the breakeven point for an extended period. As the Houthi rebels attacked ships passing through the Red Sea, disrupting shipping routes, maritime freight rates spiked.
Recently, the volume of exports has surged ahead of President-elect Donald Trump's expected increase in tariffs on China, causing freight rates to rise. Trump plans to impose additional tariffs of up to 20% on all imports and up to 60% on Chinese products. In May of last year, after President Joe Biden announced he would raise tariffs on strategic items from China, the SCFI skyrocketed from the 2,306 level to the 3,733 level within two months, an increase of about 62%.
The rising won-dollar exchange rate also positively affects the performance of shipping companies that receive freight in dollars. The won-dollar exchange rate hovers around 1,450 won, which represents an increase of about 11% compared to the beginning of last year (1,300 won).
The possibility of a resumed strike by East Coast port labor unions is another variable. The collective bargaining agreement between labor and management is set to expire on the 15th. If negotiations between the International Longshoremen's Association (ILA), representing port workers, and the United States Maritime Alliance (USMX), representing employers, fail, it could lead to port congestion and freight rate increases.
Four out of ten shipowners and cargo owners expect maritime freight rates to rise this year. According to the '2025 Global Maritime Freight Rate Forecast Survey' released by the Korea International Trade Association on the 23rd of last month, 39.8% of 413 respondents said they anticipate an increase in maritime freight rates this year.
Expectations for shipping companies' performance are also rising. According to financial information firm FnGuide, HMM's projected revenue for last year was 11.343 trillion won, and its operating profit was estimated at 3.219 trillion won. Compared to the previous year, these figures represent increases of 35% and 450%, respectively. LX International, the parent company of LX Pantos, is expected to see revenue and operating profit for this year reach 16.617 trillion won and 315.5 billion won, respectively.