Maersk sees slight pick up in container traffic
Shipping group A.P. Moller-Maersk sees scope for a slight pick up in global seaborne container traffic in 2020 compared with this year, with ongoing trade tensions limiting the chances of stronger growth. Maersk, the world’s biggest container shipper, said on Friday that it expected global container demand to grow by 1-3 percent next after compared with 1-2 percent in 2019.
“The continued weakening of global sentiment, above all in the manufacturing sector, reduces the likelihood of a growth pick-up in 2020,” the company said in a statement.
Despite headwinds from the US-China trade war, Maersk last month raised its expectations for 2019 profit, prompting its shares to jump more than 7 percent.
The company on Friday published a full set of results for the July-to-September period, reaffirming that it is on track to improve its profit margin albeit on slightly lower revenue.
The pick-up in profitability is driven by capacity management and cost control, with unit costs — the cost of moving a container on global seas — down 3 percent in the third quarter.
“We will continue our focus on profitability and free cash flow in the fourth quarter and into 2020,” CEO Soren Skou said in a statement.
Maersk has in several quarters struggled to keep costs under control amid low freight rates, rising fuel prices and a slowdown in container shipping.
As Maersk shifts its focus from market share to lowering costs, it said it expected underlying growth in its ocean business to be slightly lower this year than average market growth.
Skou has overseen a major shift in Maersk’s strategy, announced in 2016, which has included selling off its oil and gas business to focus on its container and logistics business for customers including Walmart and Nike.