Copenhagen, Denmark: AP Moller-Maersk, which accounts for a sixth of global container trade, expects global container volumes in its ocean business, its largest segment, to fall by up to 2% this year.
The sector, which enjoyed a boom during the pandemic, is now facing overcapacity due to slowing global trade in the current economic malaise. That has hit prices while rising oil and other costs have also hit its bottom line.
Maersk previously warned in August of a steeper decline in global demand for shipping containers by sea this year. It said in a trading update today that there had been “significant pressure on rates” in the past few months.
Vincent Clerc, chief executive, AP Moller-Maersk, said: “Our industry is facing a new normal with subdued demand, prices back in line with historical levels and inflationary pressure on our cost base.
“Since the summer, we have seen overcapacity across most regions triggering price drops and no noticeable uptick in ship recycling or idling,” he said.
The company plans to cut 10,000 jobs expected to provide savings next year of $600m. AP Moller-Maersk reported underlying earnings down to $1.9bn in the third quarter of the year from $10.9bn a year earlier.
