Although Maersk still achieved good results in the first quarter of this year, this was mainly due to a large proportion of long-term contracts with high freight rates. In addition, the company and the Danish Investment Bank said that the inflection point of the container shipping industry may be coming.
Maersk successfully wins more long-term contract customers
For Maersk, although inflation and rising oil prices have led to an increase in unit transportation costs and a downward trend in freight volume, more and more customers choose to sign long-term contracts with higher freight rates, which stabilizes Maersk's current and future 's earnings. Maersk Chief Executive Søren Skou said in a Wednesday press conference: “Our first quarter financial performance was strong, and combined with a negotiated increase in long-term contract prices by an average of $1,400/FFE, our revenue this year is conservatively estimated to be better than $10 billion increase last year.”
He stressed that so far, Maersk has signed long-term contracts with 71% of its customers.
However, the marginal benefit is limited. "Our earnings can go up to another 80%," Skou said. "We also need some cash for revenue flexibility, but I still expect our earnings to continue to go up to 80%."
Very high customer satisfaction
Maersk's first-quarter performance set a new record, but behind it was a 6.7% drop in shipping volumes in the first quarter, a significant increase in shipping costs, and a 71% increase in average freight rates.
The first-quarter financial performance of other liner companies is estimated to be on par with Maersk. It's clear that ocean freight customers still have to pay much more than before to get their goods shipped around the world.
DSF: Historic growth is coming to an end
Another shipping investment bank, Danish Ship Finance (DSF), which is also located in Denmark like Maersk, showed in its latest semi-annual forecast report that there are clear signs that the historical growth period that will promote the development of the container shipping market and generate huge profits is coming. Finish.
The agency said in its latest forecast report that in the short term, the currently murky demand outlook and growth in available capacity could put pressure on container freight rates and used container ship prices. Over the longer term, the market deterioration will accelerate with the influx of ships above 12,000 teu and a weaker demand outlook. This could put significant pressure on most container markets, especially raising the risk that vessels owned by tonnage suppliers will no longer be able to secure contracts. "
