How Maersk Dominates the Global Shipping Industry
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- čas přidán 12. 07. 2021
- The global container business is in chaos. Surging consumer demand, covid outbreaks and a shortage of containers has led to higher volume for ocean carriers and congestion at ports.
Maersk, the world’s largest container shipper, has seen record profits. The Danish shipping firm whose customers include Walmart and Nike announced May 2021 first-quarter revenue of $12.4 billion, a 30% increase from a year earlier. Maersk has a fleet of over 700 ships and handles one in every five containers shipped by sea. The company also owns terminals around the world and has a growing land-based logistics business. On average a Maersk container ship calls on a port somewhere around the globe every six minutes. Like its competitors the company has faced a series of obstacles in the first half of 2021 ranging from the worldwide shortage of shipping containers to the blockage of the Suez Canal.
So, with vaccine rollouts in place in the U.S. and consumer discretionary spending shifting towards services will Maersk and its rivals be able to maintain their momentum? And what do bottlenecks at ports and higher freight rates mean for U.S. consumers? Watch the video to find out what's next for Maersk.
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How Maersk Dominates the Global Shipping Industry
Of course they’re going to make record profits when the price of shipping a 20 foot container goes from $1800 to $18,000 in the matter of six months.
china...
exactly, Aug rates $24,000
They will reach over $20B cash profit in 2021.
@@sherir6242 cargo value inside is about $30k
@@elierose3021 why?
Truly is amazing that its still cheaper to make a product 6000 miles away and have it traverse a vast ocean braving high winds and waves just to make it to your front door. You could have the US factory right next door to the customer and they still can't compete.
not just cheaper, but the infrastructure and supply lines to produce the products are all over seas. Thats why the tariffs imposed by Trump was meaningless, it only hurt the consumers because at the end of the day the US can not produce the same products as overseas. Not until US invest in the proper infrastructure and supply chain needed.
The only way to compete with China is to introduce forced labour with little or no pay, just like the Chinese do.
@@davewong22 Its cheaper because here you get insane regulations. Like Europe going green and removing their industries, will benefit China greatly.
They can compete, the problem is the middlemen make less. Retail stuff is marked up so much, supporting US goods would mean lower profit margins for the middlemen, so they prefer China to maximize their profits. At the retail end, its just cheaper. This is how the 1 percent kept wages supressed the last 30 years, and now is in a pickle if Chine decides to inflate its currency.
@@orionide4032 it's not only that.
China government gives lots of loans to producers of steel, glass, solar panels and so on, causing lots of over capacity.
That's why it's cheap.
David is straight from central casting when you request a "Longshoreman type".
Definitely seems like he " lost " q few containers in his day .
He sounds and looks like a certain longshoreman union forman from the cast of Eraser staring Arnold Schwarzenegger. "No one messes with the union"
Don't make him call "Tony" !!
I swear I've seen him talking to Tony Soprano at some point
Don't know why I've always found transportation logistics fascinating, not to mention shipping ports. Their operations just seems like something I could watch all day, trying to figure out how things move about.
Logistics is a great career choice.
@@neeljavia2965 yes, I've just started my internship in logistics, it's fascinating
@@DonCorleon31 Excellent.
10 yrs working on it im glad to work for Maersk wait till you see our sorter system on warehouses
@@DonCorleon31 how did you get the internship?
I didn’t know Steve-O worked as a longshoreman
Yeaaaaaah dude
I'm proud to be part of Maersk as an officer in their vessels
Baka naman po pwede kau maka pa refer sa akin?
Akin lala popo ma sula va kana g...maka pa refer sa akin ?
I need a job
Taking a Loaded container with scrap paper to Jakarta = $2500
Taking an empty container to China = $7000
no need to be a rocket science to guess what the shipping line is going to choose to do...
taka a vessel loaded with empty containers... creating chaos at the terminal levels...
if you don't work in the industry... you wouldn't know.
Supply and demand at work, in a free market.
Obviously there is still profit to be made by Chinese companies while offering to pay higher rates, else they wouldn't.
While Indonesian paper recyclers or what ever. Either can't offer the same prices, or won't because they don't have a shortage.
Not saying this is the way things should be. But it's the way they are.
I don't know what scrap paper is used for in Indonesia. But if it's just the cheapest place to get paper recycled. Maybe this is a good thing for the climate. Because transporting stuff half way across the world to get cheap labor to make a penny, isn't really sustainable, if we want our grand kids to live comfortably on this planet.
"We're moving a lot of empty containers from this terminal, so a lot of choice New Jersey air is being sent away from here to other locations" Underrated hilarious joke.
Early in the pandemic, shipping slowed and the price of scrap steel rose, leading to many functional ships being scrapped for the money. I wonder what impact this had on the current shipping shortage.
Why did scrap metal increase so much?
@@FrancisBehnen I think the primary causes were 1) China continuing its infrastructure building boom and 2) most steel exports and ore mining being halted from around the world because of lockdowns.
Jijijijijijiji
One benefit that could happen, should shipping prices not plateau soon. Is that the cost benefit of cheap labor and operating cost of factories overseas, will become less. Hence there is an economic incentive, to moving factories closer to the end consumer.
A net win for the environment, that in turn will lower our dependency on lang haul shipping capacity.
Wishful thinking, I know.
One could also argue the other way though. That the dependency on stability in foreign countries, that make our stuff. Make the world a safer place with less wars.
And that those countries, that currently rely on their cheap labor for economic competitiveness, will suffer, should factories be moved "home".
Source?
I live across the APM Terminal and these ships are massive and definitely see a bump in activities.
너 혹시 한국인예요?
We see them all the time at any park alongside the Delaware river going to Wilmington, Philly and Trenton. they are quite a sight to behold
Maersk has always been the best!! I loved working for this company!
As a kid I always saw Maersk containers on the road. The emblem always held a place in my herat
Maersk work is commendable. Salute to the people who work on this company. Even during the pandemic Maersk is striving!
Shipping is the backbone of all society right now, sea or land. As a healthcare worker, we couldn't do it without EVERY person involved.
Big respect to everyone working there.
@kirill khizhnyak Thank you.
Very cool report,
well done report here, whoever is the Maersk reporter, props.
I only use washing machines as measurement so glad I know how many fits in a cargo container!
Americans and their football fields, olympic swimming pools and now washing machines 🙄
I only use bananas
Here in Singapore we learnt in Secondary 4/5 (equivalent to 10th grade) in public schools that Maersk moved from our ports to that of _Tg Pelepas_ in neighbouring Malaysia because it was cheaper & allowed more flexible operations. But then I later also learnt that they later moved back to Singapore in 2017 as it was more efficient
Thanks for sharing!
Pelepas is Maersk s own terminal. There are times when PSA gets so congested that alternatives are needed. Even though Changi airport is so vast, DHL has kept a major cargo warehouse in Johor Bahru.
Maersk would have gone like the other container shipping firms but for 2 major lifelines it has; it has invested so much in ports that now almost half of the major shipping terminals belong to the group. And most important, it has Maersk Oil and Maersk Drilling that keep all other businesses going
The Danes English accent are very distinct. If you've lived there, then you can immediately spot it.
There is just no way around it, haha.
True.
Oh, Very Good reporting! Thanks.
My daughter and two granddaughters are moving from Louisiana to Virginia Thursday. She and my husband have put her entire household AND her car into a 20’ sea can, sealed it up, loaded it into his trailer, hitched it to his enormous truck, weighed it, and are good to go. It's amazing what these things can hold.
This one is a rental, but when prices come down, we will be getting a bigger one to store some "preparations" in.
How much did that cost?
@@TheZProtocol I'm so sorry it took me this long to answer you!! I didn't realize I had a question.
My husband says it was $150 to rent the sea can where he got it, but he has seen them as high as $250 for the same thing. Gotta shop around. I hope I'm not too late to help you out.
czcams.com/users/shortsZiswUh9-bJo?feature=share
here's how the vehicles are stuffed into the container
funny thing is Mærsk is Danish and here in Denmark we have strong labor unions and with the various EU regulatory workers rights, etc. so at home Mærsk is much more fair to its workers than outside the EU..
Actually from what I understand MAERSK is being pretty fair to their people where ever they work and what ever countries hey are from. The company knows from the experience at home that treating people fair pays, it is much smarter in the long run to have people working that are happy to do so than the opposite.
@@bzdtemp where do you see moller maersk in the next 10 yrs?
Thanks for the good content.
Great video. Keep up the good work.
Good that a Danish company can rule like that!
I am an importer and had to pay 6 times more on this shipment compared to one mid pandemic
yeah same, and even if you can afford the prices you arent guaranteed a spot.
@@davewong22
Do you book through an agent or do you use the Maersk APP?
@@Aalliiiq this time I did DDP and it actually comes out pretty reasonable.
@@Paata02
Oh with DDP freight cost is very reasonable. Plus the seller assumes all the risk.
@@Aalliiiq we ship on average from Xiamen to US 6x 40HQ or 5x 45ft per month, needless to say this is killing us, we looked at going direct to Maersk but didn't have any luck. it seems CH Robinson is still our best bet and been using them for years but the invoices are HUGE!!
Love Maersk!
In short: they raise the price. As a company, we are experiencing rates twice as high compared to pre pandemic
Supply and demand at work, in a free market.
A shortage on a product raises prices.
Companies who can afford to pay, while still making a profit, get their stuff transported, and those who can't will close down.
In the end, it's up to consumers, how much we are willing to pay for different products. And once we collectively decide, transport prices will plateau.
Not saying that that is the way our society should work. But it's the way it currently does.
I work at a shipping company we have seen prices go up eightfould
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They didn't mention the many ships that were scrapped at the start of 2020 because they couldn't meet the new fuel regulations from the IMO. Yes volumes increased and containers are displaced but there is more to it than just pandemic shopping. Right now freight spot rates are up around 350% and you can bet that this price will be passed on to the consumer especially when large contract rates are up for renewal.
To my knowledge, most of the shipping capacity that were scrapped, wasn't until replacements were built. So it's not like capacity went down a whole lot (or possibly at all), it's just that it didn't rise as much, when ever new ships were finished.
Whether prices will be passed on to consumers or not, depends on us. If we are willing to pay more for a given product it will. If we are not willing, prices won't rise, but some company's will close down, and more competitive ones, will pick up their market share.
True. At the end, it will be the consumer who will pay. We can already see prices going up, and the greed of the shipping lines will form the root cause of this continued inflation
Your extra intell is fantastic
Good work
David was definitely a heavy smoker at some point 🤣🤣
Moving shipping containers by ship is one thing. But moving shipping containers on _land_ is also becoming a big problem, too. Here in the USA and in Canada, that's not much of a problem with doublestack container trains, but it is a problem in other parts of the world. Small wonder why the Chinese government is promoting the _Belt and Road_ initiative to move these containers by rail across the Eurasian continental land mass.
Because by rail it is faster
That’s why we need to move the factories back home
My friend applied here and pronounced it as "Mayersk" like the narrator. She failed the initial interview right away.
Is it more like "Mursk"?
@@MrMtanz Dane here: at around 0:11 in this video the name is pronounced correctly: czcams.com/video/hY578Ivugxc/video.html
Dudes... Use Google translate. Choose Danish to English (or any language).
Then in the Danish section of Google translate, there's a play icon (speaker icon), that will pronounce the Danish word for you.
@@akyhne It isn't perfect. It draws the 'æ' a bit too much.
We've seen the shipping lines record record profits, now it won't be long before the terminal operators want in on the cash flow to maximise their own profits. When this occurs, expect freight costs to rise significantly again....all in all, the end consumer will need to pickup the difference and we will see quite some retail price rises in the very near future.
Pandemic is a blessing in disguise for shipping industry with most of them doing exceptionally well with super profits. Some industries misery is another industry's gain!!
I’m so sorry for the rest of the world who gets that “choice New Jersey air” from Newark 😂🤣
Nobody wants to live in new jersey they just end up there
I know it’s a joke, but NJ is actually pretty nice in a lot of areas
maersk Line is not only shipping company,it also shipping school 👍👍👍
Nice video.
Never will the world need a bigger ship than these
Maersk baby!
Guess who’s paying these sky rocking ocean freight eventually?
you gotta pay for services my man... no one runs container ships for charity...
@@arvindnair5956
Exactly, lol.
🤦🏻♂️
But there is no inflation.... Or so liberals keep telling me.
Me 🙌🏻
@@hangender that’s not inflation dude..
Biggest jump in price was for shipping furniture (large items I guess). Maybe a good time to produce some of that closer to the retailer?
Still cheaper, but more than double the time
Or we really need to get better as a society about buying secondhand. Everyone buying new furniture during the pandemic but what is happening to all the old furniture? Straight to the landfill.
@@adamt195 hospitality industry can’t do that
This company just charges more/ When other were charging 3k for reefer from USA west coast to east asia, they were charging 12k.
They can get away with charging more, good for them
Port automation (e.g. Rotterdam) will be painful in the short run in terms of union job loss, but America needs to be capable of making such generational decisions.
Please continue to make subtitles for the video!
David played ‘Daddy’ in the series ‘Claw’. His side job is longshoremen.
Impressive
Instead of shipping toasters and washing machines around the world at ever increasing prices, perhaps local manufacturing can again be reinstated, keeping labour dollars at home.
More profitable than ever before, oh yes you're correct
Hi, I've been listening to news here on and off, and have often listen to this VO speak. I'd like to say you've improved! You used to be very robotic, lots of awkward pauses. Your speech much more smooth now and less tense in your voice. Keep it up :) Looking forward to more news.
👍👍👍good
loving the danglish
The solution is fairly simple...encourage/ incentivize people to buy as much locally produced stuff as possible and buy less junk from overseas.
@@NicholasPeters1 I agree. We are by now accustomed to buy low quality elements, those who once were local producers went into chinese cheap production goods for better profit, almost nobody is making the good quality elements of yesterday and would be very unlikely to start producing again... all is a matter of money. As you say, this will never stop.
MSC is doing quite very well too :p
It is mind boggling that these ships fully loaded actually float!
The rates are up because they charge on containers that are still on the ship(shipping lines), trucker rates are still the same
Excellent analysis. Few know what a bargain for cost-per-mile ocean shipping is. Just compare to trucks, rail, or your family van or car! LOL
Captain here:
6:21 That's 175 bananas long
~~Flies away~~
Where are you finding 8 foot bananas? 😳
Simply put, it's the ocean-going carriers' turn to gouge and charge what they want.
After years and years of losses, carriers are finally in the drivers seat
China to Uk now cost #25,000 for a 40 foot container. Too expensive.
Yes. The massive ships are ridiculously big
I wonder how this will affect consumer international moving rates.
Surge in demand, yet the US only returns around 20-30% of all containers that arrive in or near LA. Hardly a great way to keep container availability high.
Like how do you even a star a business like this from scratch..like this has to be the most you only have a chance if your parents are millionaires business
wow my uncle is chief engineer on maersk!
Do you remember working for Maersk in GTA V? Pepperidge Farm remembers
I wish they focused more on ports.
czcams.com/users/shortsZiswUh9-bJo?feature=share
here's how the vehicles are stuffed into the container
good
Why isn't David Hallerman saying *they be swimming with the fishes?* 5:07
Worked in Maersk India . Funny place . They have people from Govt schools . There was a rice export scam . The documentation manager was involved .
Am I the only one not really finding much answers in this video. Like for example why is it that Maersk looks to be profiting more than their competitors? And what is up with that CO2 neutral ship? And who did schedule it for 2030?
CNBC doesn’t understand anything really.
Maersk is bigger -> They take a bigger share of the cake
Also from my experience, they've always been more organized than their competitors
our "news" has been taken over by corporate America it no longer informs us with the truth but what the powers that be want us to believe
@@htopherollem649 To the best of my knowledge nothing wrong was told in the video. But perhaps you would like to elaborate, what part was wrong and why?
Agreed. I didn't hear solutions about how to make these inflated prices go back to normal.
I am big boss. Next working friends hahaha😂❤
Best regards from Indonesian country haha😂🎉
Apple shipped my iMac 2021 fortunately with airplane from China, last week. But of my Weber Grill I wait more than 2 months. And It should approx. come in one month.
Your grille ain’t coming
The predominance of global shipping seems to have been predicated on the proposition that, even including shipping costs, it's cheaper to manufacture goods (excluding autos) in China that are consumed in North America and Europe than to set up manufacturing in those markets and sell locally. This, along with the rapid adoption of Just-In-Time manufacturing has appeared to expose the precarity of the global supply chain, due to pandemic, extreme weather, war, or other factors. I wonder to what degree this might incent manufacturers to move factories back to their local markets in order to isolate their operations from such disruptions?
Maersk just investigated the Eurasia railway of Chinese BRI
The word "just" is unnecessary here. E.g. already in 2019 Maersk launched a regular rail freight line(AE19) between Vladivostok and St. Petersburg to ship some containers quicker from East Asian countries (especially Japan) to EU. Now these somewhat quirky alternatives that were slowly starting up for the last decade are just suddenly in very high demand and the media is talking about them.
I worked for a trucking company which picked up loads from the docks & rail yards. Maersk truck drivers outnumbered ours 3 to 1. Wonder how much their truck drivers make?
the aptly provided bananas for scale.
COOL +++++++++++++++++++
@3:40 they are citing an article from 2010 quoting the current economic situation? Might need to fix this
Tebrikler 👏👏👏
Surprised its me again
Sounds like we need more ports.
What about all the ship breakups that were in the news six months ago? Did that factor in to this crisis?
does the maersline ship go to Indonesia? how can it happen there are ships on fire? that lately there are often news of burning container ships
Oooh it's Me yersk
I like the danish accent English.
People should invest more in the container business
By the time your investment goes to work, you will have missed the boat. Prices will calm down soon.
some area crash some area stonk
Everybody profiting besides owner operators and company drivers in the industry
Bring back manufacturing to North America and Europe and the problem will be solved.
1st we have to get prices here at home under control. Example, I just bought a huge scissor lift from china that cost 9k SHIPPED and here in the states, it's over 40k! It came down to the price of steel here that's out of control. Combine that with workers that don't demand 100k a year to sweep the floor and this is how the US has become a service based economy. Wealthy workers have never come out of mcds unless they bought the place. Pretty tough on 15bucks an hour when gas is over 4bucks! In short, we are ROYALLY SCREWED! Nov2022 is our only hope, woke politics is making us go broke.
This video didn't answer the question? Why did Maersk handle it so much better than everyone else?
Because they are Danes 😎
It didn't, they are raking in money and are the worst company to deal with in the industry. Unfortunately they are so large they just don't care.
Did they, though? All the container ship lines are doing quite well, thank you very much.
That guy at 1:03 sounds like sharp did you notice?
6:36 wow 48,000 bananas for scale? This is one of the most American things i ever seen 😂😂
They are trying to explain it to the common man. Do you think villagers in India would grasp Cubic meters ?
I work in logistics. It’s a nightmare right now
Why? Can you be more specific
I’m on the carrier (Trucking) side of the buisness i manage a crew that goes to the port of Oakland’ for imports and exports. Vessels now only giving a day or day and half for receiving,. The constant changes in LRDs and Erds those r just small examples but it’s crazy 😜
Unless you have a stock in the business too, then it is heaven.
Odd that the ENORMOUS amount of damage to the environment goes unmentioned.
Well, a lot of stuff doesn't get mentioned in a 13min video on YT.
But while it wasn't the main focus of this video. It did mention, that Maersk will launch the first carbon neutral container ship in 2023.
Hence they are aware of their contribution to climate change, and will probably transition to renewables. As the technology evolves, and such ships are proven economically viable, other companies will follow. But such things takes time, and has to start with someone taking the first step. Especially with such big investments as a container ship.
@@soul0360 The point is the left gets pissy about a leaf blower while ignoring the herd of elephants in the living room, free trade. I have read articles stating if the 15 largest container ships were parked that would be the same as parking all autos and light trucks on the planet. Yet free trade continues. the hypocrisy
@@rlyle5804 I'm not an American, so I find the Left/Right narrative in your country to be somewhat amusing. As I am a Dane, I'm used to political choices not being binary, and people not getting put into a box, based on one subject such as climate. But I guess that's irrelevant, as to your real point.
I'm assuming that here, you equate MSNBC as "the left", as opposed to FOX being "the right"?
I'm sure what you read, is at least in the ball park of correct. Those things are Huge. But by parking them, how would you get most of your groceries, or that new shiny iPhone? Most of the stuff you and I consume, aren't made in the US or Denmark/Europe.
With the consumer mentality we have in our countries, we need transport capacity.
I'm in no way a proponent of transporting stuff all over the globe, just to make use of cheap manufacturing, as I've commented a bunch of times, different places on this video. So we agree on that it seems. I welcome any improvement to the ecological sustainability of this situation, wether it's technological or moving factories closer to the end consumer.
But as the video did in fact mention Mærsk launching the first carbon neutral ship already in 2023, I still find your initial comment invalid.
I don't understand the need that you, and a lot of other Americans have. Of writing "gotcha" or "what about" one liners on videos as this, without even thinking about you comments validity. And presenting it as the other party being hypocritical. Does the "likes" improve your life in any way, or does such comments sway the other side to your views? I'm trying to get and understanding here. So please enlighten me.
Your country has what, 300mio people. This news station doesn't represent the views of everyone on the left, just as FOX doesn't represent everyone on the right.
At least I hope not. Because that would be even more messed up, then what it currently looks like to the outside world.
@@soul0360 The environmental DESTRUCTION caused by free trade agreements, most of which are totally unnecessary, is ENORMOUS. Why dont so called environmental activists call for the cancelling of most free trade agreements?
PS Since most ships last more than 20 years, why does it matter that ONE ship will allegedly be built in the next few years since? The tipping point is NOW.
Thanks for informing the informed...
Any price targets for any of this companies?
Who do you think does sysops for Maersk? System operations. I'm serious - who makes em go tick tick tick instead of tick tick boom?
They have a HUGE IT department. Often getting the best CS people they can to write logistics algorithms to best balance loads, but I imagine the engineering side is also pretty hardcore.