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Maersk books record profit on surging freight demand
For the first three months of the year, the world's biggest freight company posted net profit of $2.7 billion (2.3 billion euros).
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Distribution matters: Containers, cranes and container ships are seen at an industrial port of Jakarta. Infrastructure inefficiencies, which drive up distribution costs, have increased prices of various products in Indonesia. Fortunately, fulfillment centers established by e-commerce platforms help distribute goods to different areas of Indonesia, hence boosting distribution efficiency. (Shutterstock/Creativa Images)
D
anish shipping giant AP Moller-Maersk said Wednesday that it booked record earnings in the first quarter on the back of surging demand during the coronavirus pandemic.
For the first three months of the year, the world's biggest freight company posted net profit of $2.7 billion (2.3 billion euros).
That is almost as much as the group made in the full-year 2020 and a 13-fold increase over the figure for the first quarter of 2020, Maersk said in a statement.
Sales, which were already announced at the end of April when the group raised its 2021 full-year targets, rose by 30 percent to $12.4 billion.
"Strong demand led to bottlenecks, as well as lack of capacity and equipment, which drove up freight rates to record high levels," said chief executive Soren Skou.
Maersk said it would launch a new $5-billion share buy-back programme over the next two years.
As a result of the pandemic, demand for shipping has surged since mid-2020 and especially since the end of the year, in particular from Asia to the US and Europe.
Shipping companies and analysts attribute the rise to consumers purchasing more manufactured products, instead of spending their money on trips and restaurants and other experiences.
Additionally, many companies are still in the process of restocking after reducing their orders in the first months of the pandemic.
On some routes, primarily those from Asia, some container rates have been tripled or even quadrupled.
In March, the situation was aggravated further by the six-day blockage of the Suez canal, which caused major traffic jams for vessels and held up an estimated $9.6 billion worth of cargo between Asia and Europe each day.
Maersk's share price, which has almost tripled since April 2020, was up around two percent on the Copenhagen stock exchange in early morning trade.
With operations in 130 countries, Maersk employs around 80,000 people worldwide.
