AP Moller-Maersk, is one of the largest container shipping lines in the world with a market share of about 17% and is seen by many as a barometer of global trade.
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AP Moller-Maersk On Wednesday, global container shipping demand was expected to decline this year amid weakening consumer confidence and supply chain bottlenecks.
The Danish shipping and logistics company – one of the world’s largest and a gauge of global trade – says it loaded 7.4% fewer containers on board in the second quarter compared with the same period last year. period 2021, causing it to readjust for the whole year. its container business prospects.
Maersk now expects demand to stay at its lower end, between -1% and 1% in 2022, as rising inflation and energy prices cloud the global economic outlook.
“Geopolitical uncertainty and higher inflation as higher energy prices continue to weigh on consumer sentiment and growth expectations,” the company said. said in a statement.
“Given this backdrop, in 2022, global container demand is now forecast to be at the lower end of the -1% to +1% forecast range,” it said.
Accumulate stockpile
Maersk warned that the decline was particularly pronounced in Europe, where stocks were building up at ports and in warehouses as consumer demand faltered.
Russia’s war in Ukraine and the Covid-19 shutdown in China only exacerbated such congestion, it added.
“In Europe, supply chain bottlenecks continue as retailers and manufacturers keep containers at ports and depots due to weak final demand. Port closures in China due to zero policy The tolerance of Covid-19 as well as the aftermath of the war in Ukraine also causes tension in key areas of the logistics network,” the company said.
Supply and demand fundamentals continue to occur in the logistics industry, increasing uncertainty around the freight rate outlook.
It comes as Maersk confirmed its forecast beat the second quarter on Wednesday due to soaring freight rates.
The company said trade bottlenecks have raised global freight rates, creating “extraordinary market conditions” for the logistics business and driving it to raise its profit outlook for the year.
Shipping company Maersk warned that stockpiles are building up at ports and warehouses amid a slowdown in consumer demand.
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Maersk now expects to record an underlying operating profit of around $31 billion in 2022, up from a previous estimate of $24 billion. Meanwhile, it predicts basic earnings before interest, taxes, depreciation and amortization (EBITDA) of $37 billion, up from $30 billion.
In the second quarter, the company’s revenue grew 52% year-over-year to $21.7 billion while underlying operating profit more than doubled to $8.9 billion.
All in all, the container shipping industry has benefited from higher freight rates as companies pay record sums to transport their cargo amid market disruptions. On Thursday, the shipping group Hapag-Lloyd AG raised its profit forecast after it said average freight rates rose about 80% in the first half of the year.
Maersk said that while freight rates have recently dropped slightly, they are still at historic highs and ongoing congestion issues suggest that prices continue to fluctuate.
“Continued congestion and divergence of supply and demand fundamentals in the logistics industry increase uncertainty around the outlook for freight rates,” the company said. .
