In layman’s terms, the supply chain is a network that covers the manufacture of a product from scratch till it is sold to the targeted audience. It includes all steps such as acquiring resources, organizing, utilizing technologies, and all other activities. Furthermore, it enables organizations to execute best practices such as Demand Planning. Maersk’s revenue growth is one fine example in this regard.
However, managing a highly competent supply chain while the speculations of World War-3 looming over and an ongoing war between Ukraine and Russia is more challenging along with the growing competition. This war poses the most inevitable and long-term risk for the supply chain. This issue, when first raised, had already created havoc as when the war itself happened disarrayed many organizations as they too are a part of increasingly globalized and interconnected supply chains, it is not to be questioned that this conflict will profoundly impact trade, economies, and will most likely reshape geopolitics as well as the trajectory of the supply chain for years if not decades to come.
Updates from the logistic giants
But even so in such a time a Danish shipping company active in the ocean, offering services such as supply chain management and port operations as well as inland freight transportation named A.P.Moller – Maersk A/S also commonly known as Maersk seems to have expected the earnings of 2022 to be as high as of the one earned last year.
The company was overtaken by the Swiss-based container group MSC as the world’s biggest shipper had also announced to refrain from taking bookings for goods from Russia, suspending most deliveries with exceptions of humanitarian supplies, foodstuffs, and medical to the country. Along with France’s CMA CGM, MSC has also announced the same measures saying it would continue to accept bookings for deliveries of essential goods, while CMA CGM had stated their utmost priorities remain to protect their employees as well as ensure to sustain the supply chain.
Maersk has joined the most significant three shipping lines worldwide and a list that continues to grow in shunning Moscow amid western sanctions over its invasion of Ukraine. That said, the freight rates soaring in supply chain distribution extend into the first half. But as we take a look at the shares of the company that had fallen first up to 2% and then up to 11% after reaching an all-time high in mid-January, to that the response the Chief Executive Soren Skou was that “The current market situation was expected to persist into the second quarter before easing later in the year”.
The results were published on 14 January when the company had seen a fall in ocean-going container volumes up to 4%, more than offset by Frites rates improving 80% compared with a year earlier. Danish Logistics Company DSV has predicted the continued supply chain disruption would lift its earnings. But the company that handles at least one in five containers worldwide expects an underlying profit before interest, depreciation, interests, and interests at around $24 billion this year, similarly to last year, which is minimally below the $24.4 billion expected by analysts in a poll generated by the company.
Conclusively, it is safe to say that war situations erupting between two nations can have many devastating consequences. However, war-hit nations are a part of a globalized supply chain consisting of many organizations and nations. they have interconnected networks that help the entire system run smoothly and generate revenue, profit, and earnings. These networks often function similarly to those earned in the smoothest times while supporting their respective nations and maintaining healthy human behavior towards the other party. Alongside that, Maersk has easily balanced out the ups and downs in the trade, making their supply chain seamless, so there is no lack in demand planning and customer building, ensuring a substantial profit. The war will surely leave its unfortunate losses behind, but generating a well-rounded supply chain would enable us to avoid most we can.