Maersk, the world’s largest container shipping company, predicts that global supply chain chaos will continue into next year. That could benefit the company, which just reported its best quarter in 117 years.
The surging cost of shipping propelled Maersk’s profit before taxes and interest to $5.9 billion and sales to $16.6 billion in the third quarter, the Danish company announced Tuesday. That’s the best performance for both sales and earnings since Maersk was founded in 1904.
Profits were up nearly five times over the previous year as surging freight rates more than offset higher costs. The cost of shipping has increased dramatically over the past year due to a surge in consumer demand for goods and disruption to global supply chains.
Maersk said its financial performance had been helped by strong growth in North America, Latin America, Europe and Asia, with shipping volumes from those regions increasing by nearly 10%.
It expects that supply chain chaos will continue.
Ships have been stuck waiting outside ports around the world due to coronavirus outbreaks and shortages of truck drivers needed to move goods to stores and customers. Consumers, meanwhile, are ready to spend savings accumulated during the pandemic.
“Supplier delivery times remain lengthy, and there is little visibility into when capacity constraints, including landside bottlenecks in trucking and warehousing, will abate,” said Maersk.
The “ongoing exceptional market situation” is expected to continue until at least the first quarter of 2022, it added.
Moody’s Analytics warned last month that supply chain disruptions “will get worse before they get better.”
“As the global economic recovery continues to gather steam, what is increasingly apparent is how it will be stymied by supply-chain disruptions that are now showing up at 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 that it’s buying Senator International, a global freight forwarder based in Hamburg, Germany, giving it access to more planes, railway capacity, warehousing, distribution and packaging across the Americas, Asia, Europe and South Africa.
“By strengthening our footprint within air freight, we become a sizable player able to add even more flexibility to our customers’ supply chains and further support their needs for truly integrated logistics across ocean, air and landside,” it said in the company’s quarterly report.
The German auto industry is a key customer of Senator, and carmakers including Volkswagen and BMW have been hit by a global shortage of computer chips.
Maersk is further bolstering its aviation assets by leasing three cargo planes and buying two Boeing 777 aircraft.