The outlook for container shipping in 2024 is mixed, but German shipowner Ernst Russ maintains its expectations for the year despite a slight drop in revenue in the first quarter.

Ernst Russ, which operates a fleet of 29 vessels, ended the first three months of the year with revenue of EUR 46.9m compared to EUR 48.2m in the first quarter of 2023, according to a press release.

In turn, operating profit (EBITDA) grew to EUR 27.4m compared to EUR 20.6m in the corresponding period in 2023.

Ernst Russ points to geopolitical instability as a source of uncertainty. Shipping is particularly affected by the crisis in the Red Sea, which means that many ships have to sail south of Africa rather than taking the traditional shortcut via the Suez Canal.

Specifically, the longer shipping route means that container vessels are sailing faster than usual. The crisis has pushed freight rates up and absorbed capacity at a time when shipping companies are receiving a steady stream of new ships, which could pull rates down in the longer term.

However, some of the upcoming overcapacity could be counteracted if the container fleet slows down again, according to Ernst Russ.

”The pace of container shipping has increased in the course of the rerouting around the Cape of Good Hope, but a longer-term downward trend could offset some capacity growth in the second half of the year,” the statement says.

Management maintains its guidance of revenue EUR 155-175m and an operating profit of EUR 47-67m for the full year 2024.

English edit by Kristoffer Grønbæk