Latest news with #Maersk
Yahoo
2 days ago
- Business
- Yahoo
Maersk Lifts 2025 Outlook as Global Container Market Defies Tariff Turbulence
Maersk leadership is feeling better about the remainder of 2025 as the global container market has shown resilience amid ongoing tariff whiplash. The Danish ocean carrier giant now expects worldwide container market growth to expand between 2 percent and 4 percent for the full year, raising the bottom end of the range from a 1 percent contraction. More from Sourcing Journal Tariffs Could Deliver 'Crippling Blow' to India's Fashion Producers US Ambassador Calls Panama Ports Owner 'A Bad Operator' as Cosco Rumors Ramp Up China's Exports Surge as Global Trump Tariffs Take Effect Amid the improved outlook, Maersk highlighted that the market demand has been resilient across all markets outside of North America. Both ends of the guidance assume 'a fairly continued, sluggish' U.S. market for the rest of the year, according to CEO Vincent Clerc. The projection follows President Donald Trump's sweeping 'reciprocal' tariffs on global U.S. trade partners, which officially took effect Thursday after a 90-day negotiation period ended Aug. 1. The U.S. and China have held talks in Stockholm where officials discussed a possible extension of a 90-day tariffs pause due to expire on Aug. 12. Although the China-to-U.S. trade lane has been by far the most impacted by President Trump's tariffs, China's export economy has remained robust, with Clerc calling it 'the engine behind stronger demand growth.' Chinese exports grew 7.2 percent year over year in July, accelerating over the 5.8 percent increase in June and May's 4.8 percent bump. Other regions are pulling their weight in propping up the container market, Maersk said. According to the container shipping company's second quarter earnings report, the contraction in North American imports was 'more than offset' by strong import growth into Europe, Latin America, West-Central Asia and Africa. In the second quarter, global container demand is estimated to have increased between 3 percent and 5 percent year-on-year, according to Maersk. Maersk's total revenue rose 2.8 percent year-over-year to $13.1 billion from the year prior on $845 million in earnings before interest and taxes (EBIT). Ocean revenue increased 2.4 percent to $8.6 billion. Maersk boosted its profit outlook as the carrier saw its ocean volumes increase 4.2 percent from the year prior and demurrage and detention revenues increased 20 percent. 'When you see a deceleration of demand, there tends to be more demurrage because customers are slower at picking up their containers,' said Clerc. 'When the economy heads strongly up, then you see actually less demurrage because customers are eager to pull their containers and get the goods moving through supply chain. So what we had is higher demurrage revenue because of a lot was dictated by the uncertainty on tariffs.' Maersk now expects underlying EBIT between $2 billion and $3.5 billion, up from the prior EBIT range of $0 to $3 billion. Throughout Thursday's earnings call, Clerc touched on other major goings on across the supply chain that have impacted the wider container market. With the Houthis relaunching their attacks on commercial ships in July and threatening to target Israeli-affiliated vessels, Red Sea disruption is still expected to last for the full year. Clerc said a reopening of activities looks 'unlikely,' which has been consistent with the liner's mentality since the start of the crisis in late 2023. Clerc also commented on the elevated port congestion that has been seen through Europe in 2025. 'Given the growth that there has been, there is a general undercapacity in terms of ports in Europe, where we're starting to feel more points of congestion that are impeding the networks,' Clerc said. 'This is the results of terminal capacity being added over the last 15-20 years at a slower pace than market. At some point, something is bound to happen.' According to the CEO, the European congestion is 'likely to be to be with us for a while in some shape form,' for a few years. Maersk also completed its full phase-in of the Gemini Cooperation in the second quarter, achieving 90 percent schedule reliability for the first five months since the vessel-sharing alliance with Hapag-Lloyd began. When asked if the carriers would begin charging premium rates, Clerc said that was 'too early,' and that the liners had to prove to customers that they would always be able to deliver on the high reliability promise before making such pricing changes. 'We need to sustain this for a while and then we need to move towards a more commercial discussion. I think it's premature at this stage,' said Clerc. 'I don't think customers have experienced this long enough that they're ready to entertain such a discussion, but it is something that is going to come.'
Business Times
2 days ago
- Business
- Business Times
Record short against Maersk backfires in trade-war defying rally
[COPENHAGEN] Shorting the stock of the world's largest listed shipping company during a global trade war may seem like a sure bet. But the investors who've loaded up on the trade since April have so far only been handed big losses. Shares representing just under a third of AP Moller-Maersk's free float are currently out on loan, according to S&P Global Market Intelligence, the highest level since data collection began in 2014. The measure, which is indicative of short interest, is up from about 15 per cent at the beginning of April, when US President Donald Trump announced sweeping plans for import duties on all US trading partners. After an initial plunge when tariffs were announced on Apr 2, the shares are now up about 50 per cent since early April and the Copenhagen-based company seems to be showing little sign that the restrictions are hurting its business. On Aug 7 it raised its 2025 financial forecast, citing resilient global transport demand outside the US. A Maersk spokesperson declined to comment on the share price and the short position in the stock. 'The short interest is basically speculation that tariffs will cause the global economy to slow down a gear, but we just haven't seen that happening yet as the wheels are still turning,' Lars Hytting, an investment strategist at asset manager ArthaScope, which holds Maersk shares, said by phone. 'And Maersk just shows it's best-in-class in a situation like this one.' The trade war is still in its infancy, so there is plenty of time for the short bets to come good. Trump only finalised trade deals with many US partners in recent weeks and some talks are still ongoing. Maersk has warned that tariffs will be negative for its business if consumer confidence declines and consumption slumps. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up A majority of analysts covering the stock are downbeat on the longer term prospects for the company, with the average 12-month price target indicating a decline of some 15 per cent. Still, Maersk chief executive officer Vincent Clerc has repeatedly pointed out that one of the reasons tariffs will not stop global trade is that many products are impossible or very difficult to substitute with local alternatives. As an example, almost all of the world's sneakers are made in just three countries – China, Vietnam and Indonesia – and it would be costly and take years to set up production in the US. 'Things have become more volatile and complex, but this is giving us some enormous opportunities,' Clerc said during an Aug seven presentation in Copenhagen. 'It gives us a positive potential for our logistic business, because the more complicated things are and the more supply chains need to change, the more valuable we become to our customers.' Maersk's ability to thrive during the biggest attack on free trade in decades is the just the latest example of a seemingly negative global event that has ended up benefitting the shipping industry. When transit through the Red Sea was disrupted in late 2023, forcing container lines to sail south of Africa, freight rates jumped because the extra journey effectively reduced the global shipping fleet by 7 to 8 per cent. A similar imbalance to supply and demand was triggered in 2021 when a massive container ship blocked the Suez Canal, helping the industry. And during the Covid pandemic, shipping shares initially fell, before investors understood that lockdowns were a boon for container lines, which benefited from increased demand for consumer goods. According to data from the Danish Financial Supervisory Authority, Marshall Wace was the only hedge fund with a Maersk short position exceeding the reporting threshold of 0.5 per cent of the total share capital, at 0.59 per cent, when the company raised its outlook last week. A spokesperson for Marshall Wace declined to comment. Mads Zink, Danske Bank's head of equities in Denmark, said that the Maersk stock is being shorted because of its current high valuation and because some are using it as a bet that tariffs will harm global trade. 'It may be that their thesis was correct, but the share price hasn't developed the way they might have hoped for over the summer,' Zink said by phone. 'So far, those who have shorted the stock haven't been proven right.' BLOOMBERG
Wall Street Journal
4 days ago
- Business
- Wall Street Journal
What Maersk's Results Tell Us About Global Trade
A.P. Moller–Maersk, often seen as a proxy for global commerce, raised its full-year profit outlook Thursday, pointing to stronger-than-expected demand. The key messages from the Danish container company's results: World trade is pretty healthy, leaving aside the U.S. 'We continue to see container demand coming in well ahead of expectations,' Chief Executive Vincent Clerc told CNBC. 'A lot of it is driven by the manufacturing boom in China and strong exports pretty much everywhere in the world—except for the U.S. during this quarter, where the tariff on-tariff off has had some dampening effect.' Maersk now expects 2–4% growth in global container demand for the year, up from earlier estimates that included a potential contraction.
Yahoo
4 days ago
- Business
- Yahoo
Nothing can stop falling trans-Pacific container rates: Analyst
Ocean container spot rates on the benchmark Far East-U.S. route moderated their steep declines that saw an average 53% drop since June to destinations on the East and West coasts. The latest update from shipping consultant Xeneta has market average spot rates from the Far East to U.S. West Coast at $2,098 per forty foot equivalent unit (FEU), down 3% from July 31, and $3,311 to the East Coast, 9% lower in that time. Those declines compared to a 62% decrease to the West Coast since June 1, and 53% to the East Coast since June 15, after falling a further 9% since June 31, to $2,015 per FEU. 'Carriers have taken action to arrest the plummeting average spot rates on the trans-Pacific trade to the U.S. West Coast through strong capacity management, with blanked sailings now almost double the level in mid-June,' said Peter Sand, Xeneta chief analyst, in a research note. 'The dramatic spot rate decline has slowed in August so the stronger capacity management is having some success for carriers, but this is limited and not enough to stop the downward trajectory in coming months. 'With significant overcapacity in the global container shipping fleet and a muted forecast for demand, keeping spot rates elevated will be like holding back the tide, no matter how hard carriers try.' The four-week rolling average of blanked sailings from the Far East to the U.S. West Coast has increased from 30,000 TEUs per week on June 22 to 57,000 TEUs on August 1. And because no change in supply chains occurs in a vacuum, logistics providers have observed that the increased blankings have contributed to an uptick in serious ongoing congestion issues at some of the busiest Chinese container ports. That's led to loaded boxes sitting on the docks, they said, as shippers use the ports as de facto warehouses while awaiting vessel capacity. Xeneta said market average spot rates from the Far East to North Europe were $3,330 per FEU; and $3,372 from the Far East to the Mediterranean. Far East to North Europe rates flattened after increasing 78% between May 31 and July 1, and prices are down 2% since then. Average spot rates from the Far East to the Mediterranean have declined a further 7% since July 31, and 26% since June 15. The spread in average spot rates on Far East trades to North Europe and the Mediterranean are near equal at $42 per FEU. On June 1 that number was $1,765. Since its container volumes to Europe remained strong through much of the summer, some observers have speculated that China was selling goods at drastic discounts, to keep its factories running after U.S. tariffs amounted to an embargo with its most important trading partner. Find more articles by Stuart Chirls containers post best FY since pandemic Maersk raises guidance on higher Q2 volumes Container rates unmoved by latest tariff deadline Shipbuilder sued by owner, operator of ship in deadly Baltimore bridge collapse The post Nothing can stop falling trans-Pacific container rates: Analyst appeared first on FreightWaves. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Eyewitness News
5 days ago
- Business
- Eyewitness News
How will Maersk exit affect South African exports?
The Danish shipping company Maersk announced that it would no longer carry direct cargo shipments between South Africa and the US. This will come into effect on 1 October 2025. South African exports will instead be rerouted through European transhipment hubs, which will lead to higher logistics costs and longer shipping times. Sonti says this move will hit time-sensitive shipments particularly hard.
