Global supply chains will remain unreliable and container shipping prices and profits high for the rest of the year, according to the chief executive of AP Moller-Maersk. This is because of a combination of countries reopening after Covid19, government and central bank stimulus, and the Suez Canal blockage disrupting global trade, the boss of the world’s largest container shipping line told the Financial Times.
Soren Skou said an extra two ships were needed for a weekly USAsia service that normally uses six vessels because containers were waiting outside the port of Los Angeles for up to 16 days before they could be offloaded. “You can imagine what that does to global supply chains . . . For our customers, it means their supply chains are unreliable.
“The supply and demand balance is out of the normal range. Because of all the delays around the world, basically every ship is deployed. So if demand goes up, there are no more ships to bring in.”
His comments came as the Danish group delivered its strongestever quarter of profits in its 117-year history and warned the exceptional situation of supply bottlenecks and high freight rates would last well into the fourth quarter. The recent blockage of the Suez Canal and the reopening of countries in Europe and North America come on top of an already strained situation.
Companies around the world were taken by surprise by the strength of the consumer rebound at the end of last year, particularly in the US, after lockdowns early in the pandemic. That has led to companies scrambling both to handle demand and boost their depleted stock levels.