Maersk Projects $26B Drop in Profits After Record 2022

Global shipping giant Maersk is projecting profits will plummet this year following a record 2022.

The company’s 2022 earnings report released Wednesday (Feb. 8) shows projected profits for this year will be $2 billion to $5 billion, compared to the $31 billion it saw last year thanks to a boom in pandemic-driven shipping and a spike in the cost of containers.

“We are seeing this correction happen. It creates a few new challenges. First and foremost though, it’s a return to normal,” Maersk CEO Vincent Clerc said in an interview with the Financial Times, calling the drop “an inventory correction.”

He told the FT that customers, including most of the biggest retailers in the world, over-ordered amid the congestion of the past few years.

When that congestion eases, Clerc added, “you get more goods, your warehouses are full, your inventory is high.”

The company’s earnings report shows Maersk’s revenues at $81.5 billion, a 32% increase. However, the shipper also says it anticipates a slowdown in the worldwide economy will lead “to a softer market in particular in Ocean,” meaning it will look to its logistics and terminal businesses for growth.

PYMNTS reported last year that Maersk expects to be making more from logistics than shipping by the middle of this decade.

“Our strategy is not to gain market share in ocean,” former CEO Soren Skou said on quarterly earnings call in November. “It is to gain share in our customers’ wallet of logistics spend.”

Underlining the benefits of pursuing that strategy, Maersk executives said at the time that the amount of money importers and exporters invest in trucking, warehousing, delivery and other domestic logistics add up to as much as nine times the amount they spend on ocean freight.

The past few weeks have seen a number of other investments in logistics, including Tuesday’s (Feb. 7) report that Starlinks, a Saudi logistics and supply chain solutions company, was opening a new fulfillment center in a bid to advance eCommerce in the kingdom.

The 400,000-square-foot facility with storage capacity for more than 12 million units will deploy over 250 Geek+ robots for picking and order sorting tasks, PYMNTS reported.

Also Tuesday, Wisor AI announced it had landed $8 million in seed funding to expand on its freight booking software solution.

“The complexity of supply chain management has become pronounced in recent years due to global disruptions caused by COVID-19,” Wisor AI CEO and Co-founder Raz Ronen said in a news release. “Wisor found a way to digitize this industry without requiring freight forwarders to fundamentally change the way they operate today, making the adoption seamless, while enjoying the benefits of digitization.”