China, US shipping container demand to ensure ‘exceptionally strong’ performance continues, Maersk says
- Denmark’s Maersk, which handles about one in five containers shipped worldwide, last week raised its outlook for the year
- It said there are not enough ships available in the world to meet a surge in consumer demand, resulting in record-high freight rates
Denmark’s Maersk said on Wednesday it expected its “exceptionally strong” performance in the first quarter to continue for the rest of the year, driven by high demand for shipping containers from China to the United States.
Maersk, which handles about one in five containers shipped worldwide, said there were not enough ships available in the world to meet a surge in consumer demand, resulting in record-high freight rates.
“The situation today is that our customers are trying to meet a very, very high underlying demand, while at the same time rebuilding stock,” chief executive Soren Skou said.
This is a huge problem for our customers. It’s a mess and it will take some time to clear
Imports into North American from Asia rose 40 per cent in the first three months of the year. Container ships are now waiting 16 days outside the port in Los Angeles to unload, Skou said.
“This is a huge problem for our customers,” the CEO said. “It’s a mess and it will take some time to clear.”
Skou said he expected bottlenecks in the Suez Canal, where Maersk at one point had 50 container ships waiting to pass, to be cleared by next month.
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Maersk last week raised its outlook for full-year underlying earnings before interest, tax, depreciation and amortisation (Ebitda) to US$13 billion-US$15 billion from US$8.5 billion-US$10.5 billion.
It lifted its forecast for global container demand growth to 5 per cent to 7 per cent from 3 per cent to 5 per cent. Container demand contracted 1.8 per cent last year.
“We now expect the current dynamics to last into the fourth quarter,” Skou said.
Maersk confirmed on Wednesday the 30 per cent rise in first-quarter revenue announced in a preliminary trading statement last week and reiterated its upbeat profit outlook for 2021.
The company said Ebitda more than doubled in the period to US$4.0 billion, in line with preliminary numbers.
Maersk said high free cash flow had prompted it to speed up an existing US$1.6 billion share buy-back programme and launch a new US$5 billion share buy-back programme that will conclude in 2023.
