DANISH shipping giant Maersk issued its Q3 results, detailing how it was accelerating staff redundancies whereby its global workforce will number less than 100,000 by the end of this year, having started out 2023 with around 110,000 men and women on its books.
Conceding it faced a "difficult market environment" with rates well off their 2022 peak and tested by the increase of boxship capacity, Maersk's Ocean division suffered red ink for the first time in many years recording an EBIT loss US$27 million for Q3, a far cry from the $8.7 billion the division recorded in the same quarter last year, reports Singapore's Splash 247.
"Our industry is facing a new normal with subdued demand, prices back in line with historical levels and inflationary pressure on our cost base. Since the summer, we have seen overcapacity across most regions triggering price drops and no noticeable uptick in ship recycling or idling. Given the challenging times ahead, we accelerated several cost and cash containment measures to safeguard our financial performance," said Vincent Clerc, the CEO of Maersk.
Maersk said it now sees global container volume growth in the range of minus two per cent to minus 0.5 per cent compared to minus 4 per cent to minus one per cent previously.
All liners are faced with the same troubling market dynamics - reduced demand at a time of unprecedented ship deliveries.
With nearly a container newbuilding scheduled to deliver daily for the rest of the year, brokers Braemar have warned recently it remains difficult to anticipate where the demand should be coming from to overcome the current supply situation.
Data from Clarksons Research shows there are 902 containerships on order, an all-time high, equivalent to 25 per cent of the extant fleet.
Container carriers are forecast to report a combined loss of $15 billion in 2024, according to the latest Container Market Annual Review and Forecast from UK consultants Drewry. The consultancy predicts it will not be until 2026 that fleet and demand growth will be in sync.
Analysts at Sea-Intelligence, meanwhile, have suggested that 2026 is too optimistic. The year 2028 is the earliest for overcapacity absorption of all the new capacity flowing out of yards in Asia, according to analysis from Sea-Intelligence, which is in line with the play-out after the global financial crisis.
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