Maersk sees no sign of freight market easing this year

Company handles one in five containers shipped worldwide

Fri, 17 Sep, 2021 - 15:50

Nicole Glennon

Danish shipping giant AP Moller-Maersk sees no indication that the current red-hot shipping market will lose steam this year, its chief executive said.

Maersk lifted its 2021 outlook again this week, riding the rise in freight rates that has resulted from a congested global supply chain.

The coronavirus pandemic has prompted shortages of container ships and logjams at ports at a time of high consumer spending, sending the cost of transporting freight to record levels.

"Nothing in our data suggests that the situation will change this year," Maersk Chief Executive Soren Skou told Reuters. He expects global trade volumes to grow 7% to 8% this year compared with 2020.

"We see very, very strong end-user demand combined with re-stocking and the fact that capacity in ports, warehouses and on ships is not fully utilized due to Covid-19."

Currently, 9%-10% of global container capacity is sitting outside ports waiting to discharge, he said. The problem is particularly acute at Long Beach port in Los Angeles where some 60 container ships are waiting to discharge.

Maersk, which handles one in five containers shipped worldwide, now expects full-year underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) of $22bn (€18.74bn) to $23bn (€19.59bn), up from a previous estimate of $18 billion to $19.5bn (€16.61bn).

The shipping company, which is set to publish full third-quarter earnings on November 2, also reported preliminary earnings before interest, tax, depreciation and amortisation (EBITDA) of close to $7bn (€5.96bn) billion and EBIT of nearly $6bn (€5.11bn).

Last month, Maersk said it had ordered eight new vessels which can each carry 16,000 containers to be built by South Korea's Hyundai Heavy Industries and are expected to be delivered by early 2024.