Maersk: The Fever Thermometer of the Global Economy

"He who does not know to which port he is sailing, no wind is favorable."

– Seneca

138.

That's how many ships normally pass through the Strait of Hormuz. Per day.

Last week?

Two.

Neither of them tankers.

The Strait of Hormuz — that 33-kilometer-wide passage between Iran and Oman — is one of the most critical chokepoints of the global economy. Roughly 20% of the world's oil supply and a fifth of all LNG exports flow through this corridor (chart 1).

Since the coordinated strikes by the US and Israel on Iran on February 28, 2026, this corridor has been effectively shut down. Iran's Revolutionary Guard has warned every vessel attempting the passage. At least five tankers have been hit. Insurers have pulled war risk coverage. Over 150 ships are anchored outside the strait, waiting.

Tanker traffic?

Down 90%.

And it doesn't stop at Hormuz. The Suez Canal and the Bab el-Mandeb Strait — already under pressure from Houthi attacks in the Red Sea — are shut down again as well. Maersk, Hapag-Lloyd, MSC, CMA CGM — all have suspended their crossings and rerouted around the Cape of Good Hope (South Africa).

The consequence?

Longer routes. Higher costs. Rising freight rates. Less available capacity.

These are turbulent times. And if you're wondering whether now is the time to panic — we published an in-depth analysis this week showing that stock markets have survived every geopolitical crisis of the last 100 years, without exception. The data is unambiguous: stay invested. (Read the full article: Investing in Turbulent Times)

But today isn't about what to do with your portfolio.

Today is about understanding the company at the epicenter of these disruptions.

Enter the second-largest container shipping company in the world.

A.P. Møller-Maersk.

Chart 1: The Strait of Hormuz — Global Lifeline for Oil and Gas

Maersk — Barometer of Global Trade

Maersk is more than a shipping company.

It is a fever thermometer of the global economy.

When Maersk reports that freight rates are rising, central bankers flinch. When Maersk cancels routes, economists start penciling in supply chain disruptions. And when Maersk releases quarterly results, the world reads between the lines — not about the company, but about the economy behind it.

And that's where it gets educational.

At arvy, we closely track a handful of companies as economic barometers — not necessarily because we own them, but because they tell us where the global economy is heading. Maersk for ocean freight. Old Dominion Freight Line for US domestic trucking. DSV and Kühne+Nagel for global logistics and supply chain health. Together, they form a real-time dashboard of economic activity.

And the most famous gauge of them all? The Baltic Dry Index (chart 2).

Why?

Because the BDI measures the daily cost of transporting raw materials like iron ore, coal, and grain across the world's oceans. When the index rises, it signals growing demand for raw materials — factories are ordering, houses are being built, infrastructure is expanding. When it falls, it signals the opposite: a slowdown.

What makes it special?

The BDI is free of speculation. It is based on actual freight rates — not expectations, not sentiment, not models. It is one of the few indicators that simply cannot be manipulated.

And it serves a second function: an early warning system for inflation.

Rising freight rates mean rising transportation costs. Rising transportation costs flow into production costs. And production costs flow into consumer prices. The causal chain is direct. And it is playing out in real time right now — with the Hormuz crisis as an accelerant.

Maersk therefore sits at the center of two major themes: economic activity and inflation.

But is this a "Good Story" in the arvy sense?

Let's look more closely.

Chart 2: The Baltic Dry Index as a Leading Indicator for Global Activity

Why Maersk Is Not a "Good Story" for Us

Now comes the part that might surprise you.

Despite its geopolitical relevance, despite the current headlines, despite the short-term explosion in freight rates — Maersk does not belong in our arvy portfolio.

Why?

Three reasons.

First — the cyclicality. Maersk is one of the most cyclical stocks in existence. Its earnings trajectory resembles a sine wave. In good years — like 2021 and 2022, when Covid clogged global supply chains — margins explode. In normal years, they shrink just as fast. Net profit margins swing between 2% and 30% (chart 3).

That is not a compounder. That is a roller coaster.

Second — the capital allocation. In boom years, Maersk distributes massive special dividends. Sounds generous at first glance. But it reveals a fundamental problem: the company cannot find enough attractive internal investment opportunities to reinvest capital at high returns. A true compounder — think Linde, Galderma, Stryker — manages to redeploy every earned dollar at 15%+ ROIC. At Maersk, the money flows back to shareholders because there is simply no better place for it. Special dividends are the polite way of saying: "We don't know what to do with the cash."

Third — the absent moat. Container shipping is a commoditized market. Freight rates are dictated by the market, not by the company. Maersk has no sustainable economic moat. The new Gemini Cooperation with Hapag-Lloyd is a solid operational step, but it's replicable. Scale alone does not create a moat when competitors sail the same ships on the same routes.

The result?

A company that serves arvy as an educational example — but not as a portfolio candidate.

Let’s check the “Good Chart”.

Chart 3: Maersk's Gross and Net Profit Margin — The Roller Coaster of Cyclicality

Maersk and the Road Ahead — Geopolitical Tailwind, Structural Headwind

In the short term, Maersk is benefiting enormously from the current situation.

The closure of Hormuz and the ongoing rerouting around the Cape of Good Hope are reducing global container capacity by an estimated 15–20%. Fewer available ships with unchanged demand means: freight rates rise. And with them, Maersk's revenue and margins.

The stock has gained significantly over the past weeks, trading near all-time highs.

But.

Just look at the chart (chart 4).

A violent rollercoaster.

A massive spike from 2020 to 2022 during the Covid supply chain bonanza. Then a collapse of nearly 50% from the 2022 peak into 2024. Then another geopolitical spike in late 2025 and early 2026 — driven by the Hormuz crisis.

This is the textbook signature of a cyclical stock. The gains come in violent bursts — always driven by external events, never by compounding business quality. And the drawdowns are equally brutal.

The bigger picture confirms it.

The global order book for new container vessels sits at the highest level since 2011. Once the geopolitical situation normalizes — and it will, sooner or later — a massive wave of overcapacity will hit the market. That means falling freight rates, shrinking margins, and pressure on the valuation.

And the valuation?

Its free cash flow yield ranges from 0 to 100% within the last decade.

Yes — I repeat — 0% to 100%.

That is not the hallmark of a predictable business. That is the fingerprint of extreme cyclicality — where one year the company generates more cash than it knows what to do with, and the next year it generates almost none.

Geopolitical windfall profits are not moats. They are temporary. And when the wind turns, so does the sentiment.

That's why, at arvy, our stance is clear: Maersk is fascinating to watch, instructive to understand — and a ship we observe from the harbor.

Because as Seneca said: He who does not know to which port he is sailing, no wind is favorable.

And we know our port.

Chart 4: Maersk Over the Last Ten Years — Boom, Bust, Repeat (dividend adjusted)