– Price pressure will return – E24

Maersk’s container freight lost money on operations despite the upturn in the Red Sea. Later this year, the positive effects are expected to disappear. – That is the reality, says the boss.

Investors punished Mærsk on the stock exchange after the Danish container shipping company on Thursday presented a large drop in profit for the first quarter.

The shareholders thus overlooked the fact that the management raised the accounting outlook for the year and at the same time emphasized that the shipping company in light of the unrest in the Red Sea the unrest in the Red SeaThe situation in the Red Sea, where the ships have to take a longer route around Africa due to attacks, leads to a tighter relationship between supply and demand for ships since ship capacity is tied up. The development has resulted in higher shipping rates. has “had a positive start to the year” – with, among other things, increased volumes.

A little further down in the accounts, however, the segment figures show that container shipping, which is the main business, still ended up in the red on operations. Mærsk’s terminal business was what mainly drove the company to a positive result.

– Increases the offer

At a presentation of the accounts on Thursday, Mærsk CEO Vincent Clerc also said that the gloomy shipping picture, with too many ships available, has not been cancelled. Several experts have recently warned of such a scenario.

– We expect that price pressure will return in line with that new ships are delivered at high speed and increase the supply that new ships are delivered at high speed and increase the supplyOver the past year and a half, there has been an overcapacity of ships, after both unusually strong demand for goods and major port disruptions from under the corona virus have subsided. At the same time, a record number of new ships were ordered, which will in future be delivered to the shipping companies and further burden the market.emphasizes Clerc.

– The fundamentals in the market are being postponed, he says about the current situation in the freight market.

Clerc believes that the Red Sea situation, where the ships are now sailing a longer route around Africa, will keep their numbers up for around the next two quarters.

– We will see a gradual decline in our spot rates. That is the reality, he points out.

– No matter how long the disturbances last, the fundamentals in the container market with increasing overcapacity will eventually win. We expect that this will start to hit us in either the third quarter or later, he says.

However, the Maersk accounts show that the Red Sea situation also increases costs, including fuel, and thus already counteracts some of the positive effects on shipping rates.

– Will lose money this year

Due to the Red Sea effect, Maersk raised its own accounting outlook on Thursday.

The lower part of the operating guidance (ebit) is now expected to be minus two billion dollars and up to a zero result. Before, the lower figure was minus five billion.

DNB Markets analyst Jørgen Lian emphasizes that Mærsk still presents a challenging picture of the long-term prospects. The analyst recently stated that he believes Mærsk expectations in the market are still too high.

He believes that 2025 and 2026 will be a “money sink” for the company.

Head of Analysis Simon Heaney i Drewry DrewryAnalysis agency that follows, among other things, the container market. says that the shipping market for containers is now “in a waiting mode”.

– The spot prices fall gently every week, and contracts are signed at lower prices than last year. The increase in spot prices in the first quarter will mean that the shipping companies’ finances are better than they would have been, but in general we expect them to lose money this year, he explains.

– A change in the situation in the Red Sea and the full reopening of the Suez Canal will free up capacity and quickly lower spot prices, but when that will happen, nobody knows, Heaney continues.

Read more about the market for container shipping at sea here.