Maersk warns of container shipping demand drop
STORY: Shipping group A.P. Moller-Maersk warned on Friday (August 4) of a steeper drop this year in global demand for shipping containers by sea.
Prompted by muted economic growth and customers reducing inventories.
The company is one of the world's biggest container shippers with a market share of around 17%.
And, transporting goods for companies including Walmart, Nike and Unilever, it is seen as a barometer for global economic and corporate health.
It said it expects container volumes to fall by as much as 4% - when it had previously forecast a decline of no more than 2.5%.
The CEO said he saw no sign that the destocking that has curbed global trade activity would end this year.
And that the uptick in volumes they’d expected in the second half of the year had not occurred.
Maersk posted record earnings last year due to high freight rates caused by strong consumer demand.
And logjams at ports related to the global health crisis.
But freight rates have tumbled this year amid a global economic slowdown.
And Maersk said in the second quarter, the number of containers it loaded onto ships fell by 6% from a year earlier.
That was while average freight rates halved.
Maersk on Friday posted a Q2 operating profit of around $2.9 billion, from $10.3 billion a year earlier.
The company also narrowed its profit forecast for the year.
