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Crashing box freight rates force Maersk to issue profit warning

Crashing box freight rates force Maersk to issue profit warning

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Declining freight rates in the main east-west tradelanes have seen Maersk Group be forced to issue a full year profit warning.

The previous expectation, as announced in the Danish firm’s Q2 report, was based on an underlying result contribution from Maersk Line above $2.2bn. The group now expects an underlying result from Maersk Line of around $1.6bn.

Maersk said it expects freight rates to have declined on average by $100 per feu by the end of this year and for it to have shifted 100,000 feu less than initially expected.

All other business units, such as offshore and tankers, maintain their result guidance for 2015.

“It is regrettable that we have to adjust our expectations for the 2015 result. All of our business units delivered a positive result in the third quarter, despite difficult conditions across our industries,” said group ceo Nils Andersen.

“The container shipping market has deteriorated beyond the Group’s expectations especially in the later part of Q3 and October and the Group does not expect market recovery in 2015,” the company said in a release.

Commenting on the profit warning, Lars Jensen from SeaIntel and a columnist for this site, said: “My view is that it reflects a combination of the poor peak season on the Asia-Europe trade as well as the overcapacity problem having spread to most main trades globally. I expect this is an issue which is not only related to Maersk Line but is an issue for the entire industry.”

 

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Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.

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