While the crisis in the Red Sea is straining global trade, Danish shipping company Maersk sees this as an opportunity. High freight rates in the first quarter have buoyed the company’s business, as reported by Der Spiegel.
Maersk recorded an operating profit (Ebitda) of nearly $1.6 billion in the first quarter of 2024, instilling confidence in the rest of the year. Compared to the previous year, when profits were close to $4 billion, and the fourth quarter, when they fell to $839 million, there is a positive trend.
The cause of last year’s decline was overcapacity resulting from the pandemic. Shipping companies had placed large orders for ships to meet high demand. These ships are now being delivered as the world economy falters.
Since December, Maersk has been rerouting its ships around Africa to protect against Houthi attacks. This has led to significantly higher freight rates in the first quarter. More than a third of the company’s cargo was transported at higher prices, but this was also accompanied by additional costs for fuel and rent.
Additionally, transport volumes were higher than expected, delaying the impact of overcapacity at Maersk.
The company has already earned more profit in the first quarter than previously forecasted. For the full year 2024, Maersk now expects an Ebitda between four and six billion dollars. This is also because the conflict in the Red Sea is expected to persist well into the second half of the year.
Although the economic situation is less critical than in the fall of 2023, when Maersk announced job cuts, according to CEO Vincent Clerc, there is still no relief. The high number of new ships to be delivered this and next year is expected to once again exert pressure on the maritime markets. Therefore, the cost-saving program will continue.
