Large Maritime Shippers Can Weather Industry Changes and Macroeconomic Headwinds

The start of 2025 has brought a wave of change in the maritime shipping industry. This Commentary discusses the industry trends and headwinds impacting the sector and our view on the impact to the credit profiles of large industry players.

Key highlights include:
-- A realignment of shipping alliances, the risk of fleet overcapacity, and escalating trade tensions are likely to cause downward pressure on shipping rates and profitability margins of operators.
-- Freight rates remain elevated from historical averages because of ongoing disruptions in the Red Sea as well as bulk importing ahead of escalating tariffs.
-- We expect maritime shipping companies to remain appropriately cautious in managing their leverage in anticipation of reduced earnings.

"Large shipping companies have strengthened their balance sheets in anticipation of a normalisation of rates, signalling that they remain appropriately cautious of the various headwinds facing the sector," said Chloe Blais, Vice President, European Corporate Ratings, Diversified Industries & Energy. "We expect a deterioration in earnings and leverage from current strong levels observed for the sector in 2024, though we believe that shipping companies have the capacity and headroom to adapt with the evolving market dynamics."