Maersk CEO Sees No Sign of Freight Market Easing This Year

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  • Maersk CEO sees no sign of freight market easing this year

  • the coronavirus pandemic has prompted shortages of container ships sending the cost of transporting freight to record levels

  • they expect full-year underlying earnings before interest, taxes, depreciation, and amortization (EBITDA) of $22 billion to $23 billion

  • 9%-10% of global container capacity is sitting outside ports waiting to discharge

Danish shipping giant A.P. Moller-Maersk (MAERSKb.CO) sees no indication that the current red-hot shipping market will lose steam this year says an article published on Reuters.

The rise in freight rates

Maersk lifted its 2021 outlook again on Thursday, riding the rise in freight rates that has resulted from a congested global supply chain. The coronavirus pandemic has prompted shortages of container ships and logjams at ports at a time of high consumer spending, sending the cost of transporting freight to record levels.

Strong end-user demand

“Nothing in our data suggests that the situation will change this year,” Maersk Chief Executive Soren Skou told Reuters. He expects global trade volumes to grow 7%-8% this year compared with 2020. “We see very, very strong end-user demand combined with re-stocking and the fact that capacity in ports, warehouses, and on ships is not fully utilized due to COVID-19,” he said.

Container ships waiting to discharge

Currently, 9%-10% of global container capacity is sitting outside ports waiting to discharge, he said. The problem is particularly acute at Long Beach port in Los Angeles where some 60 container ships are waiting to discharge.

Maersk, which handles one in five containers shipped worldwide, now expects full-year underlying earnings before interest, taxes, depreciation, and amortization (EBITDA) of $22 billion to $23 billion, up from a previous estimate of $18 billion to $19.5 billion.

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Source: Reuters

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