As brownwater industries start to show positive signs of recovery from pandemic-induced losses, so do the big guys on the bluewater side.
A.P. Moller-Maersk, the second largest container line in the world, reported record results for the first quarter of 2022 across all its businesses, with robust growth in ocean, logistics and terminals.
The strong earnings are driven by freight rates and contracts being signed at higher levels, the company said on May 4.
CEO Soren Skou said the company had “the best earnings quarter ever” - up an overall 55% compared to same quarter in 2021.
During the first three months of this year, Maersk said corporate revenue in the ocean transport unit increased by 64%, with strong rates more than offsetting a 7% drop in volumes. Revenue in logistics was up 41%, and terminals logged their best quarter ever, registering the fifth quarter in a row of more than 30% growth.
Skou attributed the strong results in part to Maersk’s ability to respond strategically to the needs of clients during highly difficult international conditions. “While global supply chains remain under significant pressure, we continue to demonstrate superior ability to help customers overcome logistic challenges,” he said.
Freight rates remained high during the first quarter due to Covid-19 and capacity shortages that continued to disrupt the supply-side of the logistics industry. Global container demand declined by 1.2% compared to same quarter last year, while global air cargo volumes increased nearly 3%. The company said that the war in Ukraine is having a negative impact on trade flows and consumer confidence in Europe. Given these developments, global container demand is expected to have a slower growth than anticipated.
Denmark-based Maersk expects a continued positive financial outlook moving forward, based on expected high contracted freight rates and normalization of ocean trade in the second half of the year.
The strong results at Maersk mirror the the first quarter earnings of one of the biggest brownwater inland companies. Kirby Corp., Houston, the nation’s largest inland tank barge operator, reported earnings of $17.4 million compared to a loss last year, citing improved market conditions for inland barging, increased oil and gas demand, and a slowdown in disruptions due to the Covid pandemic.
“Kirby’s business continued to gain momentum with improved market conditions and increased demand, delivering sequentially and year-on-year revenue and earnings growth,” said Kirby President and CEO David Grzebinski. “Our outlook for 2022 remains favorable, and we expect meaningful quarterly earnings progression for the remainder of the year.”
