Maersk warns about future impact of China’s lockdowns despite record quarter
Maersk has warned about the impact of China’s current lockdowns on its future performance, despite reporting record quarterly profits.
“Further challenges arise from the ongoing Covid-19 lockdowns in China, and while the impact on the first quarter is limited, it may worsen the congestion environment in coming quarters as the situation develops,” the company said in its first-quarter statement.
Maersk said cargo’s freight rates continued to increase due to a combination of congestion at ports, Covid-induced shortages and the war in Ukraine. According to China Composite Freight Index, rates out of Shanghai increased by 78 per cent in Q1 compared with 2021.
The comments come a day after a report by the Royal Bank of Canada highlighted that 20 per cent of global containers are currently stuck in various ports.
According to the data, the number of ships berthing in the port of Shanghai was 344, a 34 per cent increase on last month.
The Copenhagen-based shipping giant reported today record results across all its businesses, delivering the highest earnings quarter ever. The group’s overall revenues were up 55 per cent to $19.3bn, while its EBITDA doubled to $9.1bn.
Compared with the first quarter of 2021, all of Maersk’s businesses went up, especially its container and logistics sectors, which increased by 64 and 41 per cent.
Despite such upbeat results, the company’s chief executive Soren Skou reiterated that global container demand will quiet down in the second half of the year, causing growth to go down between 2 and 4 per cent to -1 and 1 per cent.
“The visibility is quite low,” he told the Financial Times. “Mainly we see risks building up in the economy, in China with the Covid-19 policy, where they use these very hard lockdowns, some downgrades due to a very high oil price.”