High transport costs: golden times for shipowners

Status: 02.11.2021 4:02 p.m.

Disrupted supply chains bring the container shipping industry record profits. The world’s largest shipping company Maersk has earned more money than ever in three months. Business at German rival Hapag-Lloyd is also going better than seldom before.

The shipping company Maersk opened its books today to present the figures for the past third quarter – investors liked the reading: Maersk speaks of record figures, both for the third quarter and for the nine-month period.

Thanks to very high demand and record-high freight rates, the logistics group earned more money in the third quarter than ever before in such a period. The bottom line was the profit was around 5.45 billion dollars. A year ago it was $ 1.12 billion.

The world’s largest shipping company increased sales by 68 percent to 16.6 billion dollars. In the second quarter, the Danish company based in Copenhagen had made a bottom line profit of 3.7 billion dollars. That was more than the total profit for 2020.

Billions in profit also at Hapag-Lloyd

“In the persistently exceptional market situation with high demand in the USA and worldwide interruptions in supply chains, we have further increased our capacities and expanded our range of services to transport our customers’ freight,” said Maersk CEO Søren Skouin.

The competitor Hapag-Lloyd presented preliminary figures for the third quarter yesterday and is also reporting enormous earnings growth: The operating result increased tenfold compared to the weak Corona year 2020 to almost 2.9 billion euros, as Hapag-Lloyd announced. Germany’s largest container shipping company plans to publish the final figures for the first nine months on November 12th.

High demand, limited capacities

The reason for the massive leaps in profits for shipping companies during the corona pandemic is a significant increase in demand with simultaneously scarce transport capacities, which are also lower than usual due to pandemic-related restrictions. This is driving freight rates – i.e. the prices that can be charged for transport – to a record level.

A few weeks ago, Hapag-Lloyd boss Rolf Habben Jansen commented on this: despite the fairytale profits for the container shipping companies, he hopes that business will normalize soon. “Now it’s actually too extreme,” Habben said in September dpa.

It is true that freight rates were much too low during the shipping crisis of recent years. The fact that thousands of dollars are now being called for the transport of a container is too much. “Such strong fluctuations are bad for business. Nobody really needs them,” said the CEO.

Share buyback planned

It is unclear whether the coming year will be just as successful for the shipping companies. In the coming year, the market shortage of container ships should gradually decrease, judges analyst Guido Hoymann from the Metzler bank.

His colleague from Deutsche Bank, analyst Andy Chu, on the other hand, expects 2022 to be an excellent year for the industry. After the record year 2021, business will be much better again, said Chu. The average freight rates at both Maersk and Hapag-Lloyd could increase by almost a third year-on-year.

The Maersk shipping company transports one in five containers shipped worldwide. According to its own information, the group employs almost 80,000 people. In the future, business in the air is also to be strengthened. Maersk announced that it will buy Hamburg-based freight forwarder Senator International, whose largest business is air freight, along with two Boeing aircraft for an enterprise value of around $ 644 million.

In addition, management announced that the existing share buyback program will be expanded by an additional five billion dollars in 2024 and 2025.


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