Maersk now expects a possible decrease in worldwide container volumes for 2025 on the backdrop of U.S.-levied tariffs on global trading partners and a trade war with China.
While the ocean carrier previously anticipated global container volume growth to be 4 percent in 2025, the outlook has been revised to be in a range of 4 percent growth to a 1 percent contraction.
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The container outlook remains closer to that of maritime advisory Drewry, which expects global container volumes to fall 1 percent in 2025 because of the trade policies.
Maersk maintained its full-year profit guidance, which included underlying earnings before interest and taxes (EBIT) between $0 and $3 billion.
The EBIT is based on the potential increased supply-demand imbalance that comes with new ship deliveries, as well as the impact of the Red Sea crisis on capacity. Vincent Clerc, CEO of A.P. Moller-Maersk, said during a first-quarter earnings call he expects the Red Sea issue to last for the full year, despite President Donald Trump’s insistence that the Houthis would cease firing on ships in and near the waterway.
As has been observed by U.S. West Coast ports as import bookings out of China plummeted throughout the month, China-to-U.S. volumes dropped 30 percent to 40 percent in April, according to Clerc. The CEO said Maersk was able to reallocate cargo to other areas where there’s still strong demand.
According to Clerc, shippers will have to get their hands on as much inventory as possible, but it will all depend on how much merchandise companies expect to sell, as well as how much can be domestically sourced from local distributors.
“Let’s be clear. If we don’t [strike more trade deals] before the summer, it’s going to start to hurt quite a lot across the board because there are certain commodities and certain things where you can’t really substitute some of these imports freely in terms also both in terms of SKU, but also in terms of quantities,” Clerc said during the call. “The capacity that there was in China is not available or readily available elsewhere to support the U.S. market.”
Maersk’s observed volume drop is similar to Gemini Cooperation partner Hapag-Lloyd, which said in April that its customers had canceled 30 percent of shipments to the U.S. from China.
Volumes on this trade lane make up 5 percent of Maersk’s total, while the remaining 95 percent comprising the rest of the world operates with “unchanged demand,” Clerc said.
Out on the trans-Pacific trade lane, Sea-Intelligence says blanked sailings account for 19 percent of the total Asia-to-North America West Coast planned capacity over April and May. Seventeen percent of the total Asia-to-North America East Coast planned capacity, across those two months.
This amounts to a year-over-year capacity reduction of 4 percent to 5 percent on both trans-Pacific trade lanes.
“While the Chinese volume drop will be partially offset by uptake elsewhere in Asia, it does not seem likely that gains in the rest of Asia can offset the loss from China,” said Alan Murphy, CEO of Sea-Intelligence, in the weekly briefing shared Thursday. “This could result in even more blank sailings in the coming weeks, and possibly lead to a significant drop in spot rates.”
Maersk has not cancelled a trans-Pacific sailing since the U.S. imposed escalating tariffs on China that are now at 145-percent. Since April, the Gemini Cooperation has withdrawn about 20 percent to 21 percent of its capacity, but the alliance has focused less on blank sailings, instead opting to use vessel swapping, Clerc says.
“So you have an 8,000-20-foot equivalent unit (TEU) ship, and the demand drops by 40 percent—you swap the 8,000 with a 6,000-TEU ship that helps soften that,” Clerc said. “Then you deploy your 8,000-TEU ship in another trade where the 6,000 was before and where there is better demand and where you can get better asset utilization going forward…But I want to be clear on the fact that we are managing capacity down to demand. We’ll continue to do that, and we’re doing it as aggressively as any other alliance.”
Clerc noted that while ocean freight rates have declined sequentially for three quarters in a row, they have been “some of the most stable they have been in the last few years” over the past six-to-eight weeks.
According to Drewry’s World Container Index, global ocean spot freight rate averages composited across eight major trade lanes have decreased 4.2 percent to $2,076 per 40-foot container.
Maersk reported revenue growth of 7.8 percent to $13.3 billion on net underlying profit of $1.15 billion. The shipping giant’s stock was little changed Thursday, inching up more than 1 percent after the earnings report.
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