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Freight

Global supply chain chaos to continue for months, warns shipping giant

Chaos in global supply chains will continue for several more months, one of the world’s biggest shipping companies has warned.

An “exceptional market” for transport companies including sky-high container rates will result in further bumper profits and will not ease until late 2022, Danish shipper Maersk said on Tuesday.

Maersk, which handles about a sixth of the global container trade, said its full-year underlying earnings before tax will be around $31bn (£25bn), versus a previous estimate of $24bn. It is the second upgrade to its profit forecast this year.

“The strong result is driven by the continuation of the exceptional market situation within [ocean freight],” it said in a trading update on Tuesday.

“Congestion in global supply chains leading to higher freight rates has continued longer than initially anticipated.”

Maersk said its forecasts are based on a “gradual normalisation” across ocean freight taking place in the final quarter of this year. It will publish full results for the second quarter on Wednesday.

Anders Redigh Karlsen, an analyst at Kepler Cheuvreux, said the performance was “way beyond consensus”. Maersk shares rose as much as 3.7pc at the open in Copenhagen.

The company and its rivals have been experiencing a boom for nearly two years after supply chain disruptions caused by the pandemic sent container prices soaring to record highs, driving up global inflation.

The average global price paid to transport a 40ft container fell by 0.9pc to $6,761 in the last week of July, according to maritime advisory group Drewry, having peaked at $10,377 in September last year. Before the pandemic, average prices were typically below $2,000.

Last week Germany’s Hapag-Lloyd, the world’s fifth-largest shipping line, also raised its profit forecast, saying realised freight rates have been around 80pc higher in the first six months of the year.

Brian Borsting, a Deutsche Bank analyst, said the average container rate “still remains significantly above historical levels which bodes well for the profit outlook for 2023”.

Global slowdown and signs companies have already got large back-orders in place could end up deflating prices, Mr Borsting warned. “Macro uncertainty and a high container order book are main risks,” he said.

Last month Rodolphe Saadé, chief executive of French group CMA CGM, the world’s third-largest shipper, told France’s senate that his company was expecting a slowdown in freight activity as supply bottlenecks ease.

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