Top Stories
Maersk sees weaker demand for shipping containers this year
Global Banking & Finance Review®
Company
By Jacob Gronholt-Pedersen
COPENHAGEN (Reuters) – Shipping group Maersk said it expects weaker 2022 global container demand growth on Wednesday, after moving fewer containers by sea in the second quarter due to worsening consumer confidence and bottlenecks at ports.
“Volumes in ocean (shipping) were softer as congestion continued and the war in Ukraine weighed on consumer confidence, particularly in Europe,” CEO Soren Skou said in a statement.
Maersk, seen as a barometer for global trade, said the number of containers it loaded onto ships fell by 7.4% in the second quarter compared with a year earlier.
The company, one of the world’s biggest container shippers with a market share of around 17%, revised its outlook for global container demand to the lower end of its range between minus 1% and plus 1%.
The Copenhagen-based company confirmed forecast-beating second-quarter numbers announced on Tuesday, when it also raised 2022 profit guidance as congested global supply chains that have boosted freight rates persist longer than expected.
“In Europe, supply chain congestion remained as retailers and manufacturers kept containers in ports and warehouses due to weak final demand,” the company said.
That resembles the situation in the United States, where the country’s largest warehouse market is already full as major U.S. retailers warn of slowing sales of the clothing, electronics, furniture and other goods.
On the supply side, Maersk said delivery times remained lengthy.
“It is still uncertain when capacity constraints including landside bottlenecks in trucking and warehousing will abate,” it said.
While overall freight rates remained high in the second quarter due to congestion, Maersk said short term and spot rates declined in the period compared to the first three months of the year.
(Reporting by Jacob Gronholt-Pedersen; editing by Jason Neely and Louise Heavens)
Container shipping is the process of transporting goods in large containers by sea. It is a key component of global trade, allowing for efficient and cost-effective movement of products across international borders.
Consumer confidence refers to the degree of optimism that consumers feel about the overall state of the economy and their personal financial situation. High consumer confidence typically leads to increased spending.
Freight rates are the charges levied by shipping companies for the transportation of goods. These rates can fluctuate based on demand, capacity, and other market conditions.
Supply chain congestion occurs when there are delays or bottlenecks in the movement of goods through the supply chain, often due to high demand, limited capacity, or logistical challenges.
Global container demand refers to the total need for shipping containers worldwide, which is influenced by trade volumes, economic conditions, and consumer behavior.
Explore more articles in the Top Stories category
