GRACE KAYMAERSK, the worlds largest shipping company, posted its most profitable quarter in its 117-year history last week, with profits reaching a whopping US$5,9 billion for the last three months.
Shipping companies have been one of the few players in the supply chain to benefit from the shipping crisis, as hundreds of ships wait weeks to dock and unload at key ports across the world.
“The whole system has become one gigantic bottleneck,” Maersk chief executive officer Soren Skou this week told reporters.
The Danish company more than quadrupled its operating profits to US$5,9 billion in its third quarter.
The high profits were in part driven by bottlenecks at key ports, as well as surging demand, which has led to record container freight rates.
Over the past year, the cost to ship a 20-foot container from Asia to the United States has climbed to over US$20 000, according to the Drewry World Container Index.
Skou recently told the Financial Times the company does not see an end to the shipping crisis.
“The ports are not working as well as they should, so we cant discharge containers as fast as we would like to,” Skou said.
“Its hard to see exactly when the situation would improve. Our customers are dealing with super high customer demand, and on top of that they have very low inventory.”
Skou told reporters the biggest obstacle to the flow of goods is the labour shortage, in particular a lack of truck drivers.
The company said it has added capacity throughout the year, but many of its ships are stuck waiting outside ports.
“The issue is not really a lack of ship capacity,” Skou told Bloomberg TV, adding that over 300 ships are waiting outside ports.
“The issue is that the ship capacity is being used up by waiting outside ports, and we need to solve the labour problem in the ports for supply chains to be better.”
As more companies look for ways to avoid port delays, Maersk said it is also spending over US$1 billion to expand its air freight options.
The shipping company is buying freight-forwarder Senator International, as well as purchasing and leasing five new aircraft in addition to the 15 it already operates.
The shipping company said it expects its fourth quarter to be equally profitable, as shipping rates and consumer demand show no sign of dropping any time soon.
Maersk expects to post a gross profit of between US$6 billion and US$7 billion in the next quarter.
– Business Insider US
