Maersk CEO: Christmas should be fine but 'little visibility' on when supply chain crisis will clear

Wed 3 Nov 2021
Posted by: William Barns-Graham
Trade News

xmas supply chain

Maersk CEO Soren Skou has predicted that Christmas trading will be safe from supply chain problems.

Announcing another record set of results for Q3, Skou said customers had been telling him that they were in good shape for the festive period but that it was chartering more ships, keeping ports open longer and opening more warehouses to reduce risk.

Maersk, which is the world’s biggest shipping company and handles almost 20% of the world’s shipping containers, saw pre-tax profits rise fivefold to $5.9bn in Q3.

Demand and depletion

However, Skou also told the BBC that current supply chain disruption showed no sign of easing as companies were still trying to rebuild inventories after the pandemic.

“The reality is that consumer demand is strong and at the same time our customers inventories are low,” he said.

Low visibility

Maersk has also warned there is “little visibility” about when bottlenecks in global supply chains will end.

“The whole system has become one gigantic bottleneck,” Skou told Sky News.

Port hold-ups

He said that around 300 vessels were currently stuck outside of ports around the world.

Los Angeles is the worst affected with almost 80 waiting to enter the port, with a “few” outside Felixstowe and others stuck at Chinese ports such as Shanghai and Ningbo.

Maersk said last month it was diverting one 80,000-tonne container ship per week away from Felixstowe due to backlogs.

Empties

A shortage of lorry drivers and congestion at the UK’s biggest container port is forcing shipping companies to store empty containers in a nearby field, reports the Telegraph.

About 1,000 excess containers have been stacked up at a former RAF airbase in Eye, Suffolk, 30 miles from Felixstowe.