Disrupted supply chains boost transportation giants’ profits | 2022-04-27
Disruptions to global trade flows are likely to persist in the second half of the year, longer than expected, Danish transport giant AP Moller-Maersk A/S has predicted.
Global supply chain issues are erupting again after China’s COVID-19 shutdowns caused massive congestion at ports in the Asian country. At the same time, Russia’s war in Ukraine and rising inflation are disrupting trade patterns, further hampering container flows.
There is a risk that the global container market will contract this year, Maersk said on Tuesday, forecasting global demand in the range of a 1% volume decline to a 1% gain. He had previously estimated demand growth of 2% to 4%.
Fewer containers available will keep the price of shipped goods high this quarter, with markets expected to start normalizing early in the second half, Maersk said, adding that its own profit would likely rise 25% due to the “situation.” exceptional in the market. Kuehne + Nagel International AG also said on Tuesday that trade bottlenecks were worsening amid strong demand for capital and consumer goods, as the freight forwarder reported shipping logistics profit that had tripled from last year. ‘last year.
“The already tight supply chain situation has further deteriorated” in the first three months of the year, chief executive Detlef Trefzger said in a statement. The “war in Ukraine increases uncertainty in a still tight market environment,” the Swiss company said.
Read more: The global supply chain crisis ignites again where it all began
Maersk now expects profit of around $30 billion in 2022, measured as underlying earnings before interest, taxes, depreciation and amortization, according to a statement. That’s up from the $24 billion forecast by Maersk in February and more than analysts expected. The disruption allowed container companies to charge 71% higher rates in the first quarter than a year earlier, he said.
According to Bloomberg Intelligence, container prices could drop somewhat in the short term as Chinese exports suffer from lockdowns. But once restrictions are lifted, prices are expected to rise again on a wave of pent-up demand, BI transportation analyst Lee Klaskow said in an April 22 note.