The world's largest container carrier Maersk showed record revenue

Danish AP Moeller-Maersk (Maersk), the world leader in container shipping and port management, reported a new record quarter in its 117-year history. And most importantly, she warned that there was no end in sight to the global logistics crisis.

Maersk reported that in the third quarter:

• The group's revenue increased to $16.6 billion (+68% yoy). Its earnings before interest, taxes and depreciation (EBITDA) tripled to $6.9 billion, while its operating income (EBIT) nearly quintupled to $5.9 billion.
• Most of the revenue was traditionally provided by the Ocean segment, where, against the backdrop of “high freight rates in the current exceptional market conditions,” the figure almost doubled in annual terms, from $7.1 billion to $13.1 billion.
• The company demonstrated strong growth rates in other segments as well. Logistics & Services increased its revenue by $710 million (+38%), while Terminals & Towage increased its revenue by $229 million (+24%).
• The share repurchase program (buy-back) will be increased by an additional $5 billion (about DKK 32 billion) over 2024-2025.
• The company is buying a cargo carrier, Germany's Senator International, for more than $1 billion. It is also ordering two cargo Boeing 777s and leasing three Boeing 767-300s to its own airline, Star Air.

Why is it important

Maersk expects the “exceptionally favorable” market environment for its revenue to continue until at least the first quarter of 2022. This means that the world's largest container carrier does not expect the logistical crisis to be overcome until the second half of next year. Maersk Chief Executive Officer Soren Skou said that ahead of the high season, the situation is noticeably deteriorating in the US West Coast ports, container turnover is slowing down, and their availability is deteriorating.

An important indicator of free capacity - the share of spot transportation - at Maersk has noticeably decreased. If a year ago transportation under long-term contracts was 50%, then this year it is 64%. “It is difficult to say when bottlenecks on the shipper side will be overcome, including storage capacity and delivery to the port of origin, which have become a key factor in the short-term growth of freight,” the company writes.

Find out more

The cost of container transportation began to rise from December last year. Then, due to a shortage in containers, freight rates jumped from $3,000 to $5,000-6,000 in a few weeks. A new impetus to the crisis was given by the blocking of the Suez Canal by the giant container ship Ever Given. We talked about this in more detail here .