In every election, politicians talk about all kinds of things and some of them could effect businesses or investments. In an ideal world, politicians will make business and investment reasonably easy, but politics can get in the way. Then senior management needs to make contingency plans just in case the politician is elected. How detailed are the plans will be is based on polling data or if the politician has the ability to win and potentially implement some of the talk. Senior management’s tasks with politicians is they have to work with whoever is elected, although some are easier to work with than others.

In an article by Eric Reguly of the Globe and Mail, he interviewed Charles van der Steen, the President of North America division of Maersk. The company AP Moller-Maersk is the world’s 2nd largest container-ship company with over 700 ships moving around the globe.

The good news is Maersk’s expectation is business to expand roughly in line with the rise in global GDP this year. The reason while exports to the US from China is down 20% to $427 billion in 2023, those from other countries such as Vietnam, Thailand, Indonesia and India are rising.

Many of the companies based in China that was supplying the US have operations in Southeast Asia to build supply chain diversification. This means for Maersk whatever China gives up, Southeast Asia and India will give.

Maersk was founded in 1904 in Denmark, evolved into a container business in the 1970’s and 80’s and has a market value of $23 billion. Its competitors include China’s COSCO and Switzerland’s Mediterranean Shipping.

Among the issues of tariffs, Maersk has to deal with natural disasters and wars. The war on the Red Sea which meant less use of the Suez Canal meant Maersk boosted capacity by 6 to 7% (or used more ships) for the 9 or 10 extra days needed to go around Africa.

Maersk has also invested in more logistics including trucks, planes, trains, warehouses as well as ocean terminals. The company has the ability to pivot quickly or be agile for its customers.

Linking to dividend paying stocks, in the world of politics sometimes political parties are naturally good for a business, sometimes it is a challenge, the important thing is the flexibility of the company to deal with whoever is in power. It is the reason all large companies have lobbyists from both sides of the aisle in over to have stability to do their business plan. How agile are the companies you invest in?

There are more questions than answers, till the next time – to raising questions.