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
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.