Maersk sails back to strength as de­mand lifts

Dan­ish gi­ant hikes prof­its forecast in move that raises global trade hopes de­spite US post­pon­ing China talks

The Daily Telegraph - Business - - Business - By Alan Tovey and Lizzy Bur­den

SHIP­PING ti­tan Maersk has hiked its profit fore­casts as world trade be­gins to re­cover af­ter a coron­avirus melt­down.

The firm now ex­pects to make be­tween $6bn (£5bn) and $7bn for the full year, fol­low­ing signs that de­mand is pick­ing up fol­low­ing a near-to­tal col­lapse af­ter Covid hit.

Copen­hagen-based Maersk – which also warned that it faces prob­lems get­ting stranded sailors home – is widely seen as a bell­wether for in­ter­na­tional trad­ing and its pos­i­tive up­date will raise hopes of a swift re­bound.

Part of its re­cov­ery is also due to an oil price crash which cut fuel costs.

Soren Skou, the chief ex­ec­u­tive, said that the ship­ping in­dus­try had con­tin­ued to op­er­ate through the height of the cri­sis. Mr Skou said: “Chal­lenges our cus­tomers have had with their global sup­ply chains have not been driven by an in­abil­ity to get goods trans­ported across the world but rather a lack of buf­fer in­ven­tory and sin­gle ven­dor re­li­a­bil­ity.”

Maersk’s big­gest chal­lenge is mov­ing crews be­tween its more than 700 ships. Many sea­far­ers were stranded or forced to do much longer voy­ages than ex­pected due to travel re­stric­tions. Mr Skou said the com­pany is now mak­ing progress on the prob­lem, with mea­sures in­clud­ing spe­cial flights. Maersk re­ported rev­enue of $9bn in the sec­ond quar­ter, down 6.5pc on a year ear­lier. How­ever, prof­its were up 25pc at $1.7bn. Vol­umes of cargo han­dled dur­ing the quar­ter fell 16pc in the com­pany’s ocean di­vi­sion and by 14pc in its ports busi­ness.

Con­cerns for global trade in­ten­si­fied yes­ter­day when the White House said no new trade talks have been sched­uled be­tween the US and China.

Don­ald Trump said he had postponed a re­view of the coun­tries’ Phase One deal, signed in Jan­uary as a truce in their trade war, that had been sched­uled for Aug 15 over Bei­jing’s han­dling of the pan­demic.

“I postponed talks with China. You know why? I don’t want to deal with them now,” the pres­i­dent said. “What China did to the world was not even think­able. They could have stopped [the virus].”

Asked whether he would pull out of the deal al­to­gether, Mr Trump said: “We’ll see what hap­pens.”

It came as real-time data from the World Trade Or­gan­i­sa­tion showed that global trade in goods hit the low­est level since 2007 in the sec­ond quar­ter.

How­ever, there are signs the worst im­pact on trade could have passed. The Shang­hai Con­tainer­ised Freight Rate – which cov­ers ship­ping costs on one of the world’s most im­por­tant routes – cur­rently stands at $1,150, hav­ing dropped to $825 in April, while the Baltic Dry In­dex, which tracks rates for ships fer­ry­ing dry bulk com­modi­ties, is clos­ing in on 1,600 af­ter fall­ing be­low 500 ear­lier this year.

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