The world’s largest liner shipping companies have come under fire for the low levels of tax paid during a period of record profitability.
While their bottom line hit $300bn between 2019 and 2023, the same companies paid an effective tax rate of 9.7% and less than half the global corporation tax average rate of 21.5%, according to a report from NGO Opportunity Green.
Shipping companies are exempt from the new Organisation for Economic Co-operation and Development’s (OECD’s) global minimum corporation tax of 15%.
The largest three companies, AP Moller-Maersk, CMA CGM and Hapag-Lloyd, paid only $4.6bn in taxes in total over five years, despite making nearly half of all profits globally.
James Meadway, senior director of economics at Opportunity Green, said: “This is a shameful set of statistics, and shipping companies must change course, start paying their fair share of taxes and get onboard with the true impact their operations are having on the planet.
“The international shipping sector is a significant contributor to climate change, producing 1bn tonnes of greenhouse gas emissions each year, but nowhere is this felt more acutely than in the Global South, where frontline countries are bearing the brunt of the climate crisis.”
The top 10 largest shipping companies are Moller-Maersk, CMA CGM, Hapag-Lloyd, China Cosco, Ocean Network Express, Evergreen Marine Corporation, Orient Overseas, Yang Ming Marine Transport Corporation, Wan Hai Lines and SITC, according to the report.
Along with the rest of the liner industry, they caught a pandemic profit windfall, which continued as lockdowns unwound.
The world’s 139 largest shipping companies — accounting for 90% of the world’s fleet — made almost $340bn in profits from 2019 to 2023, the NGO said.
The findings only use figures to 2023, the last year for which full figures were available.
However, since then, freight prices have soared even further, as a result of disruptions to global shipping routes, including drought restrictions at the Panama Canal and attacks by the Houthis on ships in the Red Sea.
Opportunity Green said: “As freight prices have risen, so have shipping company profits.
“Yet despite these record earnings, shipping company taxes have remained catastrophically low, and many of the world’s biggest shipping companies are failing to pay their fair share of taxes.”
The report shows that the problem is biggest in the largest and most profitable companies, with nine of the top 10 from high-income developed economies and four of those headquartered in wealthy OECD member states.
Aoife O’Leary, chief executive and founder of Opportunity Green, said: “These figures should act as a stark warning as member states from all over the globe gather at the IMO to discuss the possibility of a levy on international shipping emissions.
“The shipping industry currently produces 1bn tonnes of greenhouse gas emissions each year, and yet it continues to dodge paying fair taxes.
“It now has the unique chance to put that right by becoming the first industry to introduce a global levy and raise revenues that could be directed to deal with the worst effects of climate change in climate-vulnerable countries,” she said.
He noted that the 10 big companies were contacted for their responses to the figures in the report, with only Wan Hai Lines, Maersk and Orient Overseas confirming that the numbers provided about their company were accurate.
The report also highlighted the omission of the world’s largest shipping company, Swiss MSC Mediterranean Shipping Company, as it is privately held and does not publish its accounts.(Copyright)
