World’s Largest Shipping Company Makes Huge Profits

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GRACE KAY

MAERSK, the world’s largest shipping company, recorded its most profitable quarter in its 117-year history last week, with profits reaching US $ 5.9 billion in the past three months.

Shipping companies have been one of the few supply chain players to benefit from the shipping crisis, as hundreds of ships wait weeks to dock and unload at major ports around the world.

“The whole system has become a huge bottleneck,” Maersk Managing Director Soren Skou told reporters this week.

The Danish company more than quadrupled its operating profits to $ 5.9 billion in the third quarter.

The high profits were in part due to bottlenecks at key ports, as well as increased demand, which led to record containerized freight rates.

Over the past year, the cost of shipping 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 that the company does not see the end of the shipping crisis.

“The ports are not working as well as they should be, so we cannot unload the containers as fast as we would like,” Skou said.

“It’s hard to see exactly when the situation would improve. Our customers are facing very high customer demand, and on top of that, they have very low stock. “

Skou told reporters that the biggest obstacle to the movement of goods was the labor shortage, especially the lack of truck drivers.

The company said it has increased capacity throughout the year, but many of its ships are stranded outside ports.

“The problem is not really the lack of vessel capacity,” Skou told Bloomberg TV, adding that more than 300 vessels were waiting outside ports.

“The problem is that the capacity of the ships is being used while waiting outside the ports, and we need to address the labor issue in the ports so that the supply chains are better.”

As more companies look for ways to avoid port delays, Maersk said it is also spending more than US $ 1 billion to expand its air cargo options.

The shipping company purchases the freight forwarder Senator International, as well as the purchase and lease of five new aircraft in addition to the 15 it already operates.

The shipping company said it expects its fourth quarter to be just as profitable, as shipping rates and consumer demand show no signs of abating anytime soon.

Maersk expects to post gross profit of between US $ 6 billion and US $ 7 billion in the next quarter.

– Business Insider US


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