AP Moller-Maersk believes the containership boom is here to stay for a while yet, but warns that any rate correction will happen swiftly.
The message came after the group posted a record profit of $3.7bn in the second quarter as boxship rates hit unseen highs.
Asked by analysts on a conference call about rate-renewal levels in 2022, Vincent Clerc, the company’s chief executive of ocean and logistics, said these would depend on the trading environment in the fourth quarter.
He expects tenders to come out in October and November, with client negotiations taking place in the final three months.
"We need to bear in mind, given extreme levels on short-term rates, that corrections towards a more normal level are likely to be quite rapid," Clerc said.
Maersk group chief executive Soren Skou refused to be drawn on guidance for next year.
"We have good visibility through the next three or four months," he said.
"There is still unmet demand out there, that's why the strength of freight rate markets persists."
Analysts have noted that Maersk's profit guidance for 2021 indicates a weaker final quarter.
Skou said traditional seasonality means the third quarter is usually better than the fourth, partly due to the Christmas trade.
More resilience needed
He expects fourth-quarter profit to be lower, but "November and December are still far away, with less visibility".
Maersk has been focusing on building long-term contracts with its customers and has announced the acquisition of two logistics companies to expand its services across the supply chain.
Skou said clients are looking for more resilience from shipping and logistics companies: "Everybody learned that in the pandemic. One throat to choke is a very favourable valuable proposition."
He also acknowledged that many analysts are worried about the larger boxship orderbook for 2023.
But he said the company has learned over the last 18 months that what matters is serving its customers by deploying its fleet effectively, not "how many containerships exist in the world".
He added that the group has been adjusting capacity to meet demand.
“There are just not enough ships now, but current earnings will come down at some point,” Skou said. “We will have a much healthier business with a portfolio of long-term contracts when it happens."
He also pledged to continue to add acquisitions in the logistics sphere, saying it could soon be a $10bn business for Maersk.
Chief financial officer Patrick Jany also said the company has added more than 1m 40-foot equivalent units on multi-year contracts in 2021, ensuring stability of earnings.
Clerc said he was confident these deals would be respected, adding that this was only the beginning of longer-term partnerships.
As TradeWinds has reported, Maersk’s revenue grew to $14.2bn in the three months to 30 June — a 58% jump from a year ago. Ebit was up almost five times at $4.1bn.
