What's going on?
Maersk – the world’s biggest shipping group – reported better-than-expected earnings on Tuesday, holding its nerve even as logistical dread keeps the world’s firms up at night.
What does this mean?
It turns out it’s difficult to run a port when there are outbreaks of a contagious disease that bring operations to a standstill, or when there are so few people to hire that ships just sit there waiting to be unloaded. But that’s exactly what’s been happening at docks around the world, leading shipping rates to triple in the last year as companies pay a premium to guarantee their products get where they need to be. That’s Maersk’s time to shine: the company reported a 68% uptick in revenue last quarter versus the same time last year, and on-board investors sent its stock up 3%.
Why should I care?
The bigger picture: Maersk wants to rule the waves and skies.
Maersk isn’t resting on its laurels, mind you: the company announced on Tuesday that it’s investing more than $1 billion in its air delivery business, both by buying German air freight specialist Senator International and by adding more planes to its fleet (tweet this). It’s hoping that’ll allow it to attract new customers and give existing ones more options, which should only spell good things for its bottom line moving forward.
Zooming out: Good news for Maersk is good news for us all.
Maersk also upped its outlook for the year, with the company now expecting container demand to grow by as much as 9% this year and keep going into next. Consider that reassuring: the firm handles a fifth of all containers shipped around the world, making it a bellwether for global trade and the broader global economy. In other words, if Maersk’s doing big business, the rest of the world probably is too.