What's going on?

Shipping giant Maersk reported strong full-year results on Wednesday, but there might be trouble on the horizon�

What does this mean?

Companies were still struggling to get materials and products delivered last quarter, as portside congestion and a container shortage continued to slow the shipping industry down. They were so desperate, in fact, that Maersk was able to hike prices 80% higher than the same time in 2020 without putting customers off. So it�s no wonder Maersk made 64% more in revenue, even though those same shortages meant it shipped fewer containers. That pushed the company�s full-year revenue up by 55% versus the year before.

But Maersk soon brought investors back to earth: it�s expecting supply issues to ease up in the second half of this year, which could force the company to bring down its record-high prices. That might be why it gave a weaker-than-expected profit outlook for this year (tweet this), and why deflated investors initially sent its shares down 5%.

Why should I care?

The bigger picture: Maersk runs aground.
Maersk knows the sea shipping boom won�t last forever, which might be why it�s investing in areas that have more room to grow, like �land-based logistics�. Case in point: the company announced on Wednesday that it�s buying trucking firm Pilot Freight Services for $1.7 billion, which should help it offer more services across customers� supply chains � from sea-borne shipping to last-mile delivery.

Zooming out: The economy�s sinking.
Maersk handles a fifth of all containers shipped globally, which means its performance tends to reflect the strength of global trade and, by extension, the wider economy. So the fact it�s expecting shipping growth to slow down this year doesn�t bode particularly well. That�s not the first worrying sign either: the World Bank recently said it�s expecting global economic growth to slow from 5.5% last year to 4.1% this year, as inflation and Covid continue to stifle demand.