Maersk, the largest container ship company in the world, expects to see freight volumes drop by up to 25% in the second quarter of 2020 due to coronavirus.
In an interim report the company said Covid-19 had a “significant impact” on activity during quarter one, though revenue increased marginally (0.3%) year-on-year to $9.6bn despite lower volumes. Profits before tax rose 23% to $1.5bn.
Seren Skou, CEO of AP Moller Maersk, said: “Looking into Q2 2020, visibility remains low as a result of the Covid-19 pandemic. We continue to support our customers in keeping their supply chains running. However, as global demand continues to be significantly affected, we expect volumes in Q2 to decrease across all businesses, possibly by as much as 20-25%.”
Maersk said more than 90 sailings had been cancelled, a 3.5% drop, during the first quarter, when global container trade fell by 4.74%, and 140 were expected to be cancelled during quarter two.
Trade on east-west routes dropped 5.7% in quarter one “as Chinese exports almost came to a halt in February and European demand deteriorated in March”, both as a result of coronavirus.
North American container imports fell by 7.8% while exports from the Middle East and Indian subcontinent showed moderate growth.
Maersk said freight rates from Asia to North Europe rose 0.3%, and from Asia to Mediterranean Europe by 14%. Asia to US West Coast rates increased 2.2% and to the US East Coast by 5.5%.
The company said operating costs in its container freight division increased by 5.2% to $6.4bn in quarter one, partly due to higher fuel costs, which have been driven up by the switch to low-sulphur fuels.
Earlier this month the world’s largest container ship, the HMM Algeciras, was launched in South Korea.
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