News analysis: Maersk profits are like a country's GDP

By Sean Ashcroft
Maersk's updated 2022 forecast is $18.9bn as the pandemic sees freight costs soar. But with container shipping costs so high, when is enough enough?

As well as spreading death and endless disruption, the pandemic has also spread a little love. Mostly to shipping companies, it seems.

The world's largest shipping line, Maersk, has once more upgraded its full-year guidance. It now expects to report a further US$1.8bn in its 2022 Q4 earnings, taking its projected total for the year to $19.8bn.

Such sums are almost unfathomable. To put it into some kind of context, $19.8bn is enough money to place Maersk at 118th position in the GDP league table, between Georgia ($18.89bn) and Mali (19.33bn). There are 92 countries whose GDP is less than Maersk’s projected earnings for this year.

Maersk is laughing all the way to Dankse Bank, and it’s not alone. Far from it.

Sea shipping firms made $80 billion in 2021

In December 2021, a Sea‑Intelligence report revealed the world’s largest shipping lines made a shade under US$80bn in operating profit in 2021.

In the GDP hit-parade, US$80bn sees the shipping-line medley come straight in as a sizzling-hot new entry, at Number 70, between non-movers, Oman ($84.16bn) and Panama ($75.49bn).

Sea Intelligence - a provider of data and advisory services to the global supply chain industry, with a focus on container shipping - had more eye-watering figures to report. Chief among these was that the shipping lines’ earnings before interest and taxes (EBIT) for Q3 2021 alone was $37.24bn. Almost $40bn. In a single quarter. 

One could go on, endlessly listing obscenely large shipping-profit figures, until the GDP league table had almost as many shipping companies as countries.

Yet as the pandemic continues to spoon big fat dollops of love into the mouths of the shipping companies, much of the rest of the business world continues to subsist on a diet of chaos, disruption and cripplingly high price increases. And nowhere have prices risen faster than in sea freight.

According to Freightos, the online freight shipping marketplace, the cost of a shipping container has increased by 80% since November 2020, and almost tripled during 2021.

For multinational companies, the cost of shipping a product tends to be a small percentage of their overall costs, and they are able to absorb sky-high freight rates.

But for smaller companies, it’s a different story. 

SMEs bear brunt of sea freight inflation

Rob Wright is executive director at SCALA, a provider of management services for the supply chain and logistics sector. He told Supply Chain Digital that, anecdotally, smaller firms are bearing the brunt of the price increases.

“Reports suggest carriers are giving greater priority to larger customers, which are more likely to be operating long-term, and are offering preferential rates,” says Wright. “This runs the risk of squeezing smaller businesses out of the market.” 

Many businesses worldwide have not just been squeezed by the pandemic - they’ve been crushed to death. Since January 2020 an estimated 98,000 companies worldwide have permanently shut ('s Local Economic Impact Report).

What proportion of these (mainly smaller) businesses went under because of rising shipping costs is anyone’s guess. But there will be many, that’s for sure.

Over the past two years there has been a deal of C-suite grumbling about rising freight rates, with the odd reference to snouts and troughs. But would any of the CEOs in non-shipping businesses really have behaved differently, were the size-10 cobbled boot on the other foot? Probably not. It’s just market economics at play. 

But brother, is it playing rough.


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