HMM, the world's 8th largest container line in terms of vessel capacity, said the container shortage currently seen at some major ports could likely persist until the second quarter.

In particular, it expects the container shortage and congestion at US west coast ports to continue for some more months.

“The scarcity of containers and space on vessels will last through at least the first quarter of this year, with a likelihood that this situation continues until late spring,” HMM said.

“Supply chain disruptions led mainly by a backlog of containers and terminal congestions at several main ports are on course to remain unabated over the short term.”

However, in the “slightly longer term,” the South Korean container line said

COVID-19 vaccination programmes could lead to a shift in spending from products to services which would act to reduce freight rates.

Its outlook came as it reported record operating profits last year. 

HMM saw a 

16.3% jump in revenues to US$5.44 billion in 2020 and a record operating profit of US$831.1 million last year compared to a US$254 million loss seen in 2019.

The container line noted that its net profit for 2020 was at US$105 million against a loss of US$499.8 million in the previous year.

The fourth quarter of 2020 saw HMM’s operating profit more than doubling to US$480.5 million with an operating margin of 28.3%, coinciding with a global surge in volumes and supply chain disruptions caused by a shortage of containers at key export ports in Asia.

HMM noted that the overall improvement in its balance sheet was seen despite the overall drop in volumes it handled which came in at 3.89 million TEUs last year compared to the 4.28 million TEUs it handled the year prior.