Weekly Supply Chain Update: 13

Maersk Reports Strong Q2 2024 Performance with Significant Volume Growth Across Segments

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A.P. Moller - Maersk reported strong performance in the second quarter of 2024, with volume growth across all segments and an EBIT margin of 7.5%, up from 1.4% in Q1. Despite these improvements, consolidated revenue, EBITDA, and EBIT were all lower than in Q2 2023. Maersk saw increased profitability in its Ocean segment, significant growth in Logistics & Services, and outstanding performance in Terminals. CEO Vincent Clerc highlighted strong market demand and ongoing supply chain pressures, particularly in the Red Sea, as factors influencing their operations. The company has invested in additional equipment and continues to focus on organic growth and potential acquisitions in Logistics. The Ocean segment experienced strong volume growth and higher freight rates, especially for Asian exports. Logistics & Services grew by 7% year-on-year, with better asset utilisation and cost control boosting profitability. The Terminals sector saw increased volumes and revenue per move, achieving high EBITDA levels. Due to ongoing supply chain disruptions and strong market demand, Maersk raised its global container market growth forecast to 4-6% and adjusted its CAPEX expectations to $10-11 billion for 2024-2025.

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Pacific Basin Reports Strong 2024 Interim Results with $57.6M Net Profit, Declares Interim Dividend

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Pacific Basin announced their 2024 Interim Results with a net profit of US$57.6 million and EBITDA of US$157.9 million, yielding a 6% annualised return on equity and basic EPS of HK8.7 cents. Their financial position remains strong with US$537.4 million in committed liquidity and net borrowings of 2%. The Board declared an interim dividend of HK4.1 cents per share, representing about 50% of net profit (excluding vessel disposal gains). The company has repurchased and cancelled approximately 42.7 million shares worth US$14.6 million as part of a share buyback programme of up to US$40 million, continuing until 31 December 2024. Handysize and Supramax daily TCE earnings were US$11,810 and US$13,690, outperforming respective indices by US$840 and US$410 per day.

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Shanghai Container Futures Suggest Continued Decline in Asia-Europe Freight Rates Through 2025

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Shanghai container futures indicate that Asia-Europe freight rates might continue to decline in 2025 after peaking recently. On 5 August, August and October contracts dropped by 3% and 9% respectively from 29 July, while April and June 2025 contracts fell by 5% and 6%. The Shanghai Containerised Freight Index (SCFI) also showed a 2% drop in the Shanghai-North Europe rate to US$4,907/TEU, still much higher than US$947/TEU a year ago. Linerlytica reported that near-term contracts declined last week due to US recession fears, and trading volumes are shifting to later contracts like EC2504. Futures market pricing suggests a 4.46% weekly decline to the end of August, followed by a 4.49% weekly decline to the end of October, with continued falls into 2025. Despite this, carriers remain strong as overall capacity to North Europe is still limited, down 3.4% compared to last year. Departures from Asia are volatile due to port congestion and weather-related delays.

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CMA CGM Updates Peak Season Surcharge from Spain to the Americas and Caribbean

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CMA CGM announced that effective from 24 August until further notice, its peak season surcharge (PSS) from Spain Mediterranean Ports to West Coast of South America, West Coast of Central America, Mexico, East Coast of Central America and Caribbean will be updated. The surcharge from the French ocean carrier, which is applicable on short term contracts only, will now be €375 (US$410) per dry container.

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Shanghai Expands Container Capacity with New Luojing Port Terminal, Poised to Break 50 Million TEU Record

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Shanghai, the world’s largest container port, has inaugurated the first phase of its new Luojing Port terminal on the south bank of the Yangtze River, adding 2.6 million TEU in annual capacity. This automated terminal, which redevelops a former bulk terminal, features five berths and is expected to eventually reach a total capacity of 6 million TEU. With this expansion, Shanghai further extends its lead as the world's top container port, holding a 10 million TEU advantage over its closest competitor, Singapore. Shanghai is also poised to become the first port globally to handle 50 million TEU in a single year.

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Explosion on Yang Ming's YM Mobility at Ningbo Port; No Injuries Reported

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A Yang Ming Marine Transport ship, YM Mobility, experienced an explosion on 9 August while berthed at Ningbo's Beilun terminal in China. The 6,589 TEU vessel, built in 2011, was carrying hazardous goods, but no injuries were reported among the crew or port workers. The explosion, captured on video, caused shockwaves that impacted nearby office buildings. YM Mobility is part of the China-Gulf Express (CGX) service, which includes ports like Shanghai, Ningbo, and Jebel Ali. Preliminary findings suggest the explosion originated from a container with dangerous goods. Yang Ming stated that fire control measures were swiftly implemented, and the situation is now under control. The company is coordinating with authorities to manage the aftermath.