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Maersk Maritime, Logistics Businesses Deliver Record Q1 2022 Results

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3pls, Archives, Global Logistics, Global Trade Daily, Ocean Ports

Maersk Maritime, Logistics Businesses Deliver Record Q1 2022 Results

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A.P. Moller – Maersk (Maersk) has released the Q1 2022 financial results of its Ocean, Logistics and Terminals businesses, posting significant upsurges in revenue.

The Danish giant previously reported whole company total revenues of $19.3 billion for Q1 2022 (period ending 31 March), a 55 per cent year-on-year increase.

EBIDTA more than doubled to $9.1 billion and free cash flow also rose to $6 billion.

These record figures were driven primarily by higher freight rates and strong long-term partnerships with customers seeking end-to-end supply chain support.

“In Q1 we delivered the best earnings quarter ever in Maersk with growth across Ocean, Logistics and Terminals,” said Søren Skou, CEO of Maersk.

“The increased earnings are driven by freight rates and by contracts being signed at higher levels. While global supply chains remain under significant pressure, we continue to demonstrate superior ability to help customers overcome logistic challenges.

“In Logistics, we enjoyed strong demand for products and solutions across our portfolio leading to the 5th quarter in a row with organic growth of more than 30 per cent while Terminals presented its best quarter ever.”

Maersk’s Ocean revenue for the period rose 64 per cent to $15.6 billion. As a result of retail slack season, global demand has fallen 1.2 per cent. Due to this, volumes declined by 7 per cent, however, this was offset by strong rates.

Income for the full year is expected to continue to be strong as the increase in freight rates on Maersk’s long-term contract portfolio will add approximately $10 billion to its revenue in 2021. Maersk noted this will offset the recent 21 per cent rise in costs due to higher fuel and inflationary pressure.

The company’s Logistics business also saw a large upturn in revenue, rising 41 per cent to $2.9 billion. Maersk continues to invest in acquisitions including the recent takeover of Pilot Freight Services which was finalized on 2 May.

In Terminals, revenue amounted to $1.1 billion in Q1 2022, up from $915 million in Q1 2021.

Looking forward, Maersk foresees global container demand to fluctuate slightly between -1-1 per cent, down from an earlier expectation of 2-4 per cent. This comes as trade flows and consumer confidence in Europe is negatively impacted by the Ukraine war.

As previously announced on 28 April, the whole company now expects its EBITDA for the year to come in at around $30 billion, underlying EBIT to amount to $24 billion, and free cash flow to be above $19 billion. Previously EBITDA was expected to total $24 billion in 2022.

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3pls, Archives, Global Logistics, Global Trade Daily, Ocean Ports, Technology

West Coast Ports and Unions Clash on Automation ahead of Talks

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The Pacific Maritime Association (PMA) has released a study extolling the benefits of port automation ahead of labor talks – but unions have argued that resulting increased productivity has enhanced employment disparities.

Paid hours at the automated terminals of Los Angeles and Long Beach have increased 31.5 per cent since 2015, more than twice the rate at non-automated terminals.

Since 2019, automation introduced at terminals has reduced container processing times by half.

The data was published on 2 May in a study led by University of California at Berkeley professor Michael Nacht and commissioned by PMA.

“Higher cargo throughput will create port-related jobs and add employment throughout the supply chain. Conversely, failing to adapt threatens to drive cargo to other ports, with a cascading loss of jobs on the docks and throughout the regional economy,” Nacht and co-author Larry Henry wrote on the benefits of automation.

“What’s been proven from the pandemic, or the surge in cargo, is the fact that the facilities that are automated have been much more efficient than conventional terminals,” added Jim McKenna, CEO of PMA, in an interview last month commenting on the ongoing supply-chain crisis in the US.

“What we have really seen is that as these terminals take on significantly more cargo, they are actually taking on more man-hours for longshoremen. It is not an either-or type of situation. Automation is the future.”

The PMA has long fought to introduce automation at its terminals, but has met with criticism from the International Longshore and Warehouse Union (ILWU).

Despite accepting the terminals’ drive towards to automation, the ILWU has argued that the move would destroy human jobs as increased container volume at automated terminals has been achieved at the expense of other terminals and resulted in loss of employment.

Talks between the PMA and the ILWU are now due to take place on 12 May to produce new labour contracts for 22,000 West Coast dockworkers expiring 1 July.

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3pls, Archives, Global Logistics, Global Trade Daily, Ocean Ports

Port of Montreal Moves 1.7 Million TEU in 2021

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The Port of Montreal moved 1.7 million TEU in 2021, despite facing several challenges and crises.

Driven by the changing consumer habits in the context of the COVID-19 pandemic, the port saw a 7.5 per cent year-on-year rise in container volumes.

Overall, the Port of Montreal handled a total of 34 million tonnes of goods last year, a 3 per cent decline compared to 2020.

Operating income also remained stable as it amounted to $117.7 million in 2021, up from $116.6 million the previous year.

Expenditures for the year came in at $104 million.

Keeping in mind the port’s financial income, its net profit was reportedly $19.7 million in 2021.

Last year, several of the Port of Montreal’s major infrastructure projects reached new milestones. These include the completion of the first phase of its Contrecœur terminal project and the start of the last major step in its vast rehabilitation project of the Alexandra Pier, which began in 2014.

These projects, amongst others, aim to improve the long-term performance and efficiency of the supply chain and port facilities.

In 2021, the Montreal Port Authority (MPA) marked several sustainability achievements through the conclusion of major partnerships for the development of more low-carbon fuels and the move towards decarbonisation.

In June last year, the MPA signed a collaboration and development agreement with Greenfield Global in order to work on energy solutions.

Through these partnerships and the installation of digital solutions, the port has seen a 33 per cent reduction in greenhouse gas (GHG) emissions since 2007.

“The past year tells us one thing, and that is how necessary it is to know how to adapt, in all circumstances, to disruptions, unforeseen events and factors outside the normal course of operations that may affect the supply chain,” said Martin Imbleau, President and Director General of the MPA.

“As a public service, we are putting everything in place to ensure the future of the Port of Montreal. We do it for local businesses that import and export products that are essential to their operations and their vitality and, ultimately, we do it for the ultimate customer, the consumer, the citizen.”

The Port of Montreal also recently joined the United Nations Global Compact for the implementation and promotion of sustainable business development.

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3pls, Archives, Global Logistics, Global Trade Daily, Ocean Ports, Uncategorized

COSCO Shipping Ports Announces Q1 2022 Results

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COSCO Shipping Ports Limited (CSP) has released first quarter results for 2022, posting revenues of $329.7 million.

The revenues are an increase of 24.2 per cent year-on-year.

Gross Profit increased by 30.5 per cent to a total of $80.9 million, while share of profits from joint ventures and associates increased by 1.9 per cent year on year to $82.5 million.

During the period, profit attributable to equity holders of the company increased by 2.6 per cent year-on-year to $74.9 million.

© COSCO Shipping Ports Limited

As a result of the global pandemic, for the three months ended 31 March 2022 the total throughput of the Greater China region decreased by 3.6 per cent to 22,520,167 TEU, accounting for 74.3 per cent of the group’s total.

Despite this decline, CSP total global throughput reached 30,291,588 TEU in the first quarter of this year, registering an increase of 0.3 per cent year on year.

The group said the growth was primarily driven by its subsidiary Tianjin Container Terminal. The port handled approximately 4.63 million TEU of containers in the first three months of 2022.

The total equity throughput from controlling-stake subsidiaries was 7,487,432 TEU, a 39.5 per cent increase.

Turning to overseas regions, the total throughput of Greater China increased by 11.7 per cent to 7,771,421 TEU and accounted for 25.7 per cent of the group’s total.

Due to the continuous congestion of major ports in northwest Europe, CSP has noted that the Zeebrugge Terminal NV became an important buffer port. The terminal increased its throughput by 24.4 per cent year-on-year to 272,344 TEU.

CSP has acknowledged the impact of the COVID-19 pandemic on the maritime industry, declaring its intention to focus on improving quality and efficiency, control costs, and maintain a stable financial situation.

Last March, CSP announced its annual financial and operational results for 2021, posting a significant improvement in revenue.

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3pls, Archives, Global Logistics, Global Trade Daily, Ocean Ports

Port of Brisbane Welcomes New Container Park from MEDLOG

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Logistics and supply chain operator MEDLOG will set up a new automated container park at the Port of Brisbane.

The company, which is one of the businesses within the MSC Group, has signed a 30-year lease for a 7.3-hectare site on Fisherman islands.

According to the port, once the facility is fully operational, it will be one of the world’s most automated container parks, incorporating high-end technology to deliver world-class standards in terms of operation and safety.

Brisbane will develop the site to MEDLOG’s specific requirements for the storage and operations of both empty and full laden containers.

The project is expected to be completed by Q3 of this year.

Sustainable elements, such as solar installation and use of low carbon concrete will also be included in the design of the facility, as is standard in all new port property.

“MEDLOG’s expansion into Queensland and its new home at Port of Brisbane speaks volumes about its confidence in the Port being the right place to support its long-term growth,” said Neil Stephens, CEO of the Port of Brisbane.

“Port of Brisbane is on a journey to become Australia’s premier port and logistics hub; welcoming industry leaders such as MEDLOG plays a key role in ensuring the Port of Brisbane achieves this vision and continues to deliver for the Queensland economy and community well into the future.”

Brisbane also recently made an appearance in PTI’s ‘Top 5 Ports in Australia 2021’ list.

Last year, the port processed a total of 1,554,061 TEU, of which 730,252 TEU were imports, while the remaining 723,951 TEU were exports.

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3pls, Archives, Global Logistics, Global Trade Daily, Ocean Carriers, Ocean Ports

Maersk, CMA CGM in Driving Seat for Highest Earning Carriers in 2021

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Resulting from record demand and supply chain capacity challenges, container lines saw record earnings in 2021. A.P. Moller – Maersk (Maersk) and CMA CGM are amongst the top performers.

Maersk saw the largest yearly intake, as its ocean revenue increased substantially last year, surging to $48.2 billion, up from $29.2 billion in 2020. This was partially driven by strong volumes and storage income.

“Exceptional market conditions led to record-high growth and profitability in Maersk, however it also led to supply chain disruptions and severe challenges for our customers,” said Søren Skou, CEO of Maersk.

CMA CGM also saw its shipping revenue rise by 88.5 per cent compared to the previous year, reaching $45.3 billion.

The success of its shipping activities was the main driver in the group’s overall revenue of $56 billion.

Mediterranean Shipping Company (MSC) is also believed to have been amongst the top earners of the year. However, as the business is private, the company’s financial information is not accessible.

COSCO Shipping, a subsidiary of the COSCO Group, reported revenue of $34 billion in 2021. This led to a net profit of $9.5 billion.

Ocean Network Express (ONE) is the only major carrier yet to publish its financial results for Calendar Year (CY) 2021. In its recent Q3 Financial Year 2021 report, it projected its revenue to amount to $29 billion in FY2021.

The company said that seasonal factors, such as Chinese New Year and blank sailings due to supply chain disruptions will have a large impact on its performance in Q4 FY2021.

German shipping line Hapag-Lloyd published its “extraordinarily strong” financial figures in March. The company’s overall revenue surged to $26.4 billion in 2021, up from just $11.8 billion the previous year. These positive results were mainly driven by high freight rates, introduced due to very strong demand for goods exported from Asia.

Lastly, finalising our list of the top earning carriers in 2021 is Evergreen Marine Corporation.

Eric Hsieh, President of Evergreen, announced the company’s financial results for the year at a press conference last month.

The carrier’s revenue was 236 per cent higher than it was in 2020, coming in at $17.6 billion. Transpacific volumes accounted for 60 to 70 per cent of its income, while Asia-Europe cargoes contribute the remaining 30 per cent.

Despite global shipping lines making an astounding combined operating profit of over $110 billion in 2021, vessel reliability was considerably low throughout the year.

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3pls, Archives, Global Trade Daily, Ocean Carriers

Supply Chain Pressure Mounts as Shanghai Extends Lockdown

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Due to rising cases of COVID-19, the lockdown in Shanghai has been extended – sparking congestion fears amongst port officials.

China’s largest city went into lockdown on 28 March. While the lockdown was initially intended to last 10 days, it has now been extended.

On 2 April, Shanghai reported 438 confirmed locally transmitted cases and 7,788 asymptomatic carriers.

Despite this, operations at the Port of Shanghai remain active, with industrial companies and customs switching to a two-shift operation.

Although preventative measures have been implemented at China’s largest port, authorities across the world are beginning to see delays in supply chains.

“The COVID-19 outbreak in Shanghai is causing a local lockdown that is also affecting the port,” said the Port of Hamburg in a statement, noting that Shanghai is now in a state of “emergency” in managing COVID-19 transmission.

“The extent to which this will have an impact in Hamburg is not yet foreseeable. This will only become evident in a few weeks’ time.”

For the Port of Hamburg, Shanghai is one of the most important ports in China trade as they are connected by 13 liner services and four general cargo services.

In an attempt to alleviate the pressure on road transportation caused by the impacts of the crisis, the Shanghai International Port Group (SIPG) has announced the launch of a container “land-to-water” service, covering the ports in the Yangshan area and Waigaoqiao area of Shanghai port to related ports in the Yangtze River Delta areas.

Under the service, customers can first transport containers to the Taicang Service Center, and then transfer them by ship to Shanghai Port and divert customers’ road transportation needs to waterways.

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3pls, Archives, Global Logistics, Global Trade Daily, Ocean Ports, U.S. Ports

East Coast Congestion now Worse than West Coast

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According to MarineTraffic, more ships are now waiting outside US East Coast ports than along the West Coast.

As of today (7 April) 15 containers vessels carrying a total of 95,000 TEU are at anchor, waiting to enter the Ports of Los Angeles and Long Beach.

At the same time, 18 ships are waiting off port limits to berth at the Port of Charleston, and 12 are outside the Port of Norfolk. These vessels are carrying a combined total of 209,000 TEU.

Shipping expert Lars Jensen previously noted that vessel queues outside Charleston were rising, as 31 vessels were waiting to berth at the port on 25 February.

“As can be seen on vessel finder there are also large queues of vessels outside the other major US East and Gulf Coast ports. It thus appears that part of the reason for the improvement in California is not that the supply chain problem is being resolved – the problem is merely being shifted elsewhere,” Jensen said in a social media post.

About Port Technology International

The maritime industry sits at the center of the global economy, and ports and terminals are vital to ensuring the safe passage of goods across the supply chain. Massive technological changes mean now is a great time to enter the industry, with the biggest ports, terminal operators, carriers and logistics firms investing heavily to connect cities, countries and regions through the power of trade.

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3pls, Archives, Global Logistics, Global Trade Daily, Ocean Carriers

Port of Virginia Cargo Volumes Continue to Soar

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The Port of Virginia has handled more than 314,000 TEU in March 2022, registering an increase of more than 35,000 TEU (or 12.6 per cent) since March last year.

Nearly 47 per cent of the total volume was in loaded imports.

The volume figures for the month were also ahead of both January and February 2022, which were respectively 262,000 and 297,000 TEU.

“In terms of overall volume, this March ranks as the fourth most productive month in our history,” said Stephen A. Edwards, CEO and Executive Director of the Virginia Port Authority.

“We are processing heavy volumes and doing so with fluidity, which continues to draw interest from ocean carriers and cargo owners. This means we are keeping our focus on those operational issues that drive efficiency and meeting the needs of all port users.”

Edwards added that the port’s berth efficiency will further increase with the addition of two new ship-to-shore cranes that were delivered in late March to Norfolk International Terminals (NIT).

The new cranes will go into service in late May giving the port 30 ship-to-shore cranes capable of handling Ultra-Large Container Vessels (ULCVs).

“Combine this new equipment and the expansion of NIT’s Central Rail Yard and its North Berth with our effort to create the only port on the US East Coast with channels deep enough and wide enough to handle two-way movement ULCVs and we have the necessary foundational components to drive cargo growth here for decades to come,” commented Edwards.

“It also means that, in parallel, we’ll be able to provide an even higher level of efficiency, service, and care to all of our users.”

In 2021, the Port of Virginia posted its most productive year on record having processed more than 3.5 million TEU.

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3pls, Archives, Global Logistics, Global Trade Daily, News, Ocean Ports, U.S. Ports

Port of Los Angeles Completes $65 million Everport Terminal Improvement Project

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The Port of Los Angeles has completed the construction of its $65 million Everport Container Terminal Improvement Project. 

The scheme looked to improve Everport’s container handling efficiency and capacity, while also allowing it to accommodate the projected fleet mix of larger vessels anticipated to call at the terminal over the next two decades.

The deployment of these larger vessels encourages fewer ship calls, further reducing air emissions. This directly supports the port’s Clean Air Action Plan goals.

“The completion of this project marks years of planning and perseverance through a challenging pandemic and unprecedented cargo surge,” said Port of Los Angeles Deputy Executive Director of Development Tony Gioiello.

“Thanks to our partners, we have completed a critical step in our efficiency goals, ensuring the Everport Terminal’s readiness to receive the next generation of container vessels.”

The Los Angeles Board of Harbor Commissioners approved the project in 2017. Construction began in 2019 and included:

  • Berth deepening
  • Mooring bollard and berthing fender upgrades
  • Construction of an additional 1.5 acres of backland
  • Electrical improvements for five new Alternative Maritime Power connections
  • Electrical infrastructure for three additional container cranes
  • Charging equipment for clean-energy and electric trucks

Dredging increased water depth to -53 feet alongside Berths 266-229 and -47 feet alongside Berths 230-232 to accommodate ships loaded with up to 16,000 TEU.

Back in June 2021, the Port of Los Angeles announced its budget for capital improvements projects increased by 42.5 per cent year-on-year after the Los Angeles Board of Harbor Commissioners approved a $1.7 billion Fiscal Year annual budget.

Under this budget, $13 million was set aside for Everport Container Terminal improvements.