The Copenhagen-based company, which transports goods for retailers and consumer companies such as Walmart, Nike and Unilever, posted a record profit last year on strong demand for container shipments and sharp increases in freight rates. With the slowdown in global trade and the decline in demand for consumer goods due to high inflation, the demand for containers is declining and freight rates are decreasing.
Companies are now trying to run out of stock in warehouses before shipping new goods from Asia to Europe and the United States. As a result, Maersk reported a decline in freight volumes of 9.4% in the recent quarter, while freight rates decreased by 37% compared to the same period in 2022.
“Maritime industry must manage capacity in a disciplined way”
Earnings before interest, taxes and amortization and depreciation fell 56% in the first quarter to nearly $4 billion. Analysts had expected adjusted profit of about $3.6 billion. Maersk reiterated its forecast that global container demand will decline by 2.5% this year. The company also delivered on its forecast of an annual profit of between $8 billion and $11 billion. Last year, Maersk reported a record profit of nearly $37 billion.
Discipline
CEO Vincent Clerc told Bloomberg TV that the shipping industry will need to be “disciplined” with capacity and more ships may need to be closed by the end of the year. “We have already seen that a lot of transport capacity is no longer being used due to lower demand for transport volumes.” According to him, more new vessels will be commissioned in the second half of the year and next year, which will create a new challenge for the industry.