When the economy slowed last year, few industries were as hard-hit as the shipping sector, which found its vessels stuck at port as global sea-borne trade fell off a cliff.

Two shipping giants—China COSCO Holdings Co. Ltd. (COSCO) and China Shipping Container Lines Co. Ltd. (CSCL)—were among the victims, reporting losses of 6.3 billion yuan ($922.7 million) and 6.5 billion yuan ($952 million), respectively, in 2009.

Their container lines and dry bulk operations—transporting bulk commodities such as iron ore and coal—declined to a trickle, leaving many vessels idle. Even more troubling was the sector's overcapacity problem as the large order of vessels made before the financial crisis finally hit the oceans.

The Baltic Dry Index, a proxy for shippers' costs and profits, staged a prolonged rally in the latter half of 2009 as the world economy put the worst behind it. But surges in crude oil prices made it difficult for shippers to break even, said Mao Ang, a senior analyst with China Galaxy Securities Co. Ltd.

Looking ahead, COSCO and CSCL both expect to record profits this year with a substantial market turnaround.

But one cause for concern is soaring iron ore prices that may depress Chinese demands for imports and put a freeze on cargo traffic, said Yu Jianjun, an analyst with the Huatai Securities Co. Ltd.