Rising shipping cost pushed Maersk’s earnings before taxes and interest to $ 5.9 billion and sales to $ 16.6 billion in the third quarter, the Danish company announced on Tuesday. That’s the best performance in both sales and earnings since Maersk was founded in 1904.
Profits were up nearly fivefold from the previous year as higher freight rates more than offset higher costs. The cost of shipping has risen dramatically over the past year due to an increase in consumer demand for goods and the disruption of global supply chains.
Maersk said its financial performance has been helped by strong growth in North America, Latin America, Europe and Asia, with shipping volumes from those regions increasing by nearly 10%.
Expect supply chain chaos to continue.
Ships have been stuck waiting outside ports around the world due to coronavirus outbreaks and a shortage of truck drivers needed to move goods to stores and customers. Meanwhile, consumers are willing to spend the savings accumulated during the pandemic.
“Supplier delivery times remain long, and there is little visibility of when capacity constraints, including onshore bottlenecks in transportation and warehousing, will disappear,” Maersk said.
The “current exceptional market situation” is expected to continue until at least the first quarter of 2022, he added.
“As the global economic recovery continues to gather steam, what is becoming increasingly apparent is how it will be hampered by the supply chain disruptions that are now popping up around every corner,” Moody’s wrote in a report.
Maersk takes flight
Maersk is turning to aviation as global supply chain congestion continues to disrupt international trade.
The company said Tuesday it is acquiring Senator International, a global freight forwarder based in Hamburg, Germany, which gives it access to more aircraft, rail capacity, warehousing, distribution and packaging in the Americas, Asia, Europe and South Africa.
“By strengthening our presence within air transport, we have become a major player capable of adding even more flexibility to our customers’ supply chains and further supporting their truly integrated ocean, air and land logistics needs.” he said in the company’s quarterly report. .
Maersk is further strengthening its aviation assets by leasing three cargo aircraft and purchasing two Boeing 777 aircraft.