Maersk warns global container volumes could drop due to trade war
COPENHAGEN : Shipping group A.P. Moller-Maersk warned on Thursday that a global trade war and geopolitical uncertainty could trigger a drop in global container volumes this year, although it left its profit outlook unchanged.
Trade tariffs imposed by US President Donald Trump have prompted companies worldwide to cut sales targets and major economies to revise down growth prospects, impacting demand for shipping goods at sea.
Maersk, viewed as a barometer of world trade, said it now expects global container volumes within a range of down 1% to up 4% this year, compared with the 4% growth estimated at the beginning of the year.
'The outlook for global container demand over the remainder of the year remains highly uncertain, shaped by a rapidly evolving trade policy landscape and increasing recession risks in the US,' Maersk said.
Many companies rushed to ship goods to the US at the beginning of the year in anticipation of potential tariffs. But, most economists are calling the Trump tariff gambit a demand shock to the world economy which will sap global activity.
Maersk said it expects market growth in the second quarter if customers take advantage of a 90-day pause in the bulk of planned US tariffs to build inventories.
'In the latter part of the year, there is, on the one hand, a growing risk that demand could contract, and on the other the possibility that trade rebounds if tariffs are rolled back,' the company said.
Maersk, whose customers include Walmart, Target, and Nike, said last week that it had yet to cancel a single trans-Pacific crossing this year, although it had downsized some vessels.
German rival Hapag-Lloyd said in April that its customers had cancelled 30% of shipments to the US from China.
Maersk said that policy uncertainty and the threat of a further escalation in the trade war cast a shadow over the US economic outlook.
'If Chinese exporters redirect lost US exports to other markets, a protectionist backlash could follow, risking a broader trade war,' it warned.
Maersk still expects earnings before interest, taxes, depreciation and amortisation (Ebitda) this year of between US$6 billion and US$9 billion.
Its Ebitda rose 70% year-on-year to US$2.71 billion in the first three months of the year, compared with the US$2.41 billion expected by analysts in a company poll.
Maersk shares opened little changed.
Red Sea disruption
Maersk also said it expects Red Sea disruption to continue throughout the year, despite comments by Trump on Tuesday that the US would stop bombing the Iran-aligned Houthis in Yemen.
Maersk and rivals have benefited from longer sailing times and soaring freight rates as ships are rerouted around Africa as Houthi militants have kept up attacks on Red Sea vessels in what they say is in solidarity with Palestinians in Gaza.
Trump said the Houthis had agreed to stop attacking US ships, but the group later said the deal did not include sparing Israel, suggesting its shipping attacks would not come to a complete halt.
There have been no reports of Houthi attacks on shipping in the Red Sea area since January.
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