Record-high profits for shipping companies during the pandemic
The COVID-19 pandemic caused many disruptions to the global supply chain, especially strongly affecting maritime shipping. Port closures and congestions, inefficient capacity utilization of container vessels, a decrease in schedule reliability, and surging freight rates have strongly impacted the global container shipping industry. Although container ship operators need to adapt and overcome the pandemic-related issues complicating their day-to-day operations, the pandemic has proved extremely profitable for container carriers since it has allowed them to increase freight rates dramatically.Maersk raised its freight rates from, on average, 2,000 U.S. dollars per FFE* in 2020 to 4,628 U.S. dollars per FFE in 2022. Although the volume of freight transported by Maersk decreased between 2020 and 2022, Maersk’s revenue reached over 81.5 billion U.S. dollars in 2022, an increase of almost 32 percent compared with 2021. In the first quarter of 2023, however, Maersk was charging 2,871 U.S. dollars per FFE of containers transported, down from 4,553 a year ago. Following the global trend of falling freight rates, it can be expected that the company’s earnings in 2023 will be lower that those of 2022.
Main competitors of Maersk
Maersk’s main competitors are container carriers with substantial container fleets, such as MSC, CMA CGM, and COSCO Group. At the beginning of 2022, MSC overtook Maersk as the container carrier with the largest capacity of its fleet. As of May 2023, MSC controlled ships with a total capacity of over five million TEUs. CMA CGM and COSCO group operated 12.9 and 10.9 percent of the global container ship fleet, respectively.On specific trade routes, Maersk competes with mid-sized container carriers like Hapag-Lloyd, ONE, and Evergreen Line, that control between 6.7 and 6.2 percent of the global container vessel fleet. In 2022, Hapag-Lloyd generated a revenue of about 34.5 billion euros.
* FFE stands for Forty Foot Equipment.
