Danish shipping giant Maersk has revealed record-breaking results for the first quarter of the year, driven largely by the success of its freight services.
Earlier this week, Maersk announced revenue had increased by 55 per cent to $19.3 billion (£15.6 billion) compared with $12.4 billion from Q1 2021.
At the same time, its EBITDA had more than doubled from $4 million during the first three months last year to $9 million for the same period in 2022.
Chief executive officer of Maersk Soren Skou stated this is the result of freight rates, as well as contracts signed at higher levels.
“While global supply chains remain under significant pressure, we continue to demonstrate superior ability to help customers overcome logistic challenges,” he said.
The CEO also noted a strong demand for products and solutions, resulting in growth for the fifth consecutive quarter of over 40 per cent.
Similarly, Terminals had its best quarter to date, with revenue increasing to $1.1 billion during Q1, in comparison with $915 million during the three-month period in 2021.
The company has been growing since demand for shipping fell during the start of the pandemic at the beginning of 2020. Since freight services resumed, its profits have been strong.
This is despite Covid-19 measures still causing restrictions for the firm and its logistics, resulting in bottlenecks in several ports.
A spokesperson from Maersk was reported by Hurriyet Daily News as saying: “Port congestions eased slightly from their peaks in the US in the first quarter, while they increased further in Europe and China.”
“This continued to result in shortages and challenged supply chain management
services and kept rates elevated,” it was added.
The Maersk 2022 Supply Chain Management Forum recently took place to discuss solutions to supply chain problems, including congestion, port closures, disruption and bottlenecking.
It stated the pandemic has highlighted specific problems with “shelves physically and proverbially empty at times”.
Strong partnerships, good communication, foresight, preparedness, and digital solutions were determined to be the key components to supply chain problems, and things logistic teams need to work on.
Freight rates have risen as a result of these supply difficulties on the back of the pandemic. However, when it comes to looking ahead at the rest of 2022, increases are not expected to continue at the same rate.
Due to trade flow growth from the Far East to North America and Europe flattening, and Russia invading Ukraine and its subsequent impact on trade flows and consumer confidence in Europe, global container demand is anticipated to vary by one per cent this year. This is lower than the previous estimation of a two to four per cent growth.
Maersk expects EBITDA to reach $30 billion, EBIT to peak at $24 billion and free cash flow of more than $19 billion for the whole of 2022, primarily based on strong results for the first half of the year, in addition to higher contracted rates.
For more information about shipping freights, contact our port agency in Hull today.
