The increase in shipping rates since the start of the pandemic has been a huge boon for Maersk. But the Danish maritime giant is warning that its business will have to face tougher times soon.
The company said on Wednesday that a looming global recession is expected to reduce container demand by between 2% and 4% in 2022, with “many dark clouds on the horizon”.
Maersk shares, seen in the market as a barometer of the health of the economy due to the company’s exposure to moving goods around the world, fell nearly 6%. Stocks are down 35% so far this year.
While Maersk made record profits last quarter due to “substantially higher freight rates,” it said rates began to decline towards the end of the period “due to weakening customer demand, along with markets starting to normalize.” with fewer supply chain disruptions” and less congestion.
In addition, ocean freight volumes have dropped. CEO Søren Skou told CNN’s Julia Chatterley that this decline is “clearly a sign that the consumer is not spending as much money as they have in recent years and probably also a sign that many of our customers have too much inventory. ”
Consumption in general, he added, is “weighted by very, very negative sentiment.”
“I’m not a macroeconomist, but I would be surprised if Europe weren’t in recession right now,” Skou said. He thinks the United States is likely to follow suit “sometime in the next year.”
Demand for larger goods like televisions, sofas or grills also dropped after people made big purchases during lockdowns. Now, they won’t need to buy replacements for some time.
“Once you buy this, you probably won’t have that demand again for a few more years,” Skou said.
Source: CNN Brasil
Joe Jameson, a technology journalist with over 2 years of experience, writes for top online news websites. Specializing in the field of technology, Joe provides insights into the latest advancements in the industry. Currently, he contributes to covering the world stock market.
