Anyone worried that a global recession is looming will take no comfort from the trading update issued today by AP Moller-Maersk.
The Danish company, the world’s biggest name in container shipping, is usually a reliable indicator of what is happening – or about to – in global trade.
And its message today was not encouraging.
‘Dark clouds on the horizon’
Soren Skou, the company’s chief executive, said it was clear that, following an exceptional period of trade, freight rates had peaked and had begun to normalise during the last three months. He said this was driven by both decreasing demand and easing of supply chain congestion.
Mr Skou added: “With the war in Ukraine, an energy crisis in Europe, high inflation, and a looming global recession – there are plenty of dark clouds on the horizon. This weighs on consumer purchasing power which in turn impacts global transportation and logistics demand.”
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His warning sent shares of Maersk, which more than doubled in value between the end of January last year and the middle of January this year, down by more than 7%. The company, the second largest on Denmark’s blue-chip OMX 20 index after the drug-making giant Novo Nordisk, has seen its stock market valuation fall by two-fifths since it peaked on 13 January.
Mr Skou went on: “As a result of increasing inflation and economic slowdown, demand for ocean shipping began to decline in August and this was clearly observed in both rates and volumes.”
He said Maersk now expected full-year contract rates to be slightly lower than it was expected earlier in the summer – largely due to volumes on east-west ocean routes seeing a 10% decline in volumes year on year.
Global slowdown
The comments from Maersk, which employs more than 80,000 people worldwide and which has a 17% share in the market for ocean-bound freight, are an ominous indication that trade is slowing globally.
Mr Skou said the company had been “anticipating normalisation” for…
Source : skynews
