[Edaily Reporter Park Soon-yeop] Analysts are suggesting that attention should be paid to the short-term momentum across the entire transportation sector as container shipping rates have surged following the war in the Middle East. While it is too early to expect a structural turnaround in the industry, the simultaneous rise in rates on major routes to the U.S. and Europe has increased the likelihood of improved earnings for shipping and logistics companies, including HMM.
Choi Min-ki, an analyst at Shinhan Investment Securities, stated in a report on the 11th, “While a structural turnaround is premature, the short-term momentum created by the freight rate rebound is valid,” adding, “Given that stock prices have been sluggish even considering the uncertain business conditions, it is necessary to focus on factors improving fundamentals.” He maintained a “neutral” investment rating on the transportation sector.

According to Shinhan Investment Securities, the Shanghai Containerized Freight Index (SCFI), a benchmark for container shipping rates, has risen by 105% since the outbreak of the war in the Middle East. While the initial rise in freight rates was limited to Middle Eastern routes directly affected by geopolitical risks, it has since spread to major routes such as the Americas and Europe starting in May.
On the U.S. route, shipping demand was brought forward due to a surge in shipments ahead of the expiration of tariff caps and the earlier-than-usual Amazon Prime Day. On the European route, supply-side bottlenecks—such as port congestion and rerouted voyages—contributed to upward pressure on freight rates. Major shipping companies have also announced additional freight rate hikes starting in mid-June.
Signs of a recovery in performance are also emerging. The combined revenue of Taiwanese container shipping companies, which report monthly sales, returned to year-over-year growth in April and saw the growth rate expand to 27.2% in May. Researcher Choi explained, “Like Taiwanese carriers, HMM, which has high exposure to the Pacific and European routes, can also expect revenue growth in the second quarter.”
However, cost pressures remain a key variable. Bunker fuel prices, which surged sharply at the onset of the war, have stabilized at a level 40% higher than pre-war levels. While fuel costs and war insurance premiums are largely passed on to freight rates in the form of fuel surcharges and risk premiums, it is difficult to predict the extent to which indirect costs—such as the shift to alternative routes, increased inland logistics costs, and reduced network efficiency—will be reflected in freight rates.
Consequently, a recovery in revenue may not directly translate into increased operating profit. However, considering the rebound in freight rates and improved cargo volumes, it is highly likely that the trend of declining profits compared to the previous quarter will reverse in the second quarter.
HMM was identified as the direct beneficiary of the rise in container shipping rates. While global competitors have shown robust stock performance driven by rising freight rates, HMM’s stock price has recently underperformed. Shinhan Investment Securities assessed that, given concerns over excess vessel supply and inflation in developed economies, a trend reversal in the container shipping market is unlikely; however, since HMM is currently recording higher profitability than its global competitors, a short-term investment approach is valid to narrow the valuation gap.
The rise in container shipping rates is also positive for other shipping companies besides HMM. Rising intra-Asian rates could boost Pan-Ocean’s container shipping performance. Analysts also note that #Hyundai Glovis and #CJ Logistics, which operate forwarding businesses, have secured room for revenue growth and margin improvement. With upward pressure also mounting on air freight rates—which serve as a substitute for container shipping—Korean Air’s cargo business is expected to continue its strong performance.
Researcher Choi noted, “HMM is the direct beneficiary of the rebound in container ship spot rates,” but added, “The rise in freight rates is positive for the transportation sector as a whole.”