Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Maersk sees slight pick up in container traffic next year

Published 15/11/2019, 07:59
Updated 15/11/2019, 07:59
© Reuters. FILE PHOTO: Truck transports a Maersk shipping container by a cargo ship at a port in Qingdao

© Reuters. FILE PHOTO: Truck transports a Maersk shipping container by a cargo ship at a port in Qingdao

COPENHAGEN (Reuters) - Shipping group A.P. Moller-Maersk (CO:MAERSKb) sees scope for a slight pick up in global seaborne container traffic in 2020 compared with this year, with ongoing trade tensions limiting the chances of stronger growth.

Maersk, the world's biggest container shipper, said on Friday it expected global container demand to grow by 1-3% next after compared with 1-2% in 2019.

"The continued weakening of global sentiment, above all in the manufacturing sector, reduces the likelihood of a growth pick-up in 2020," the company said in a statement.

Despite headwinds from the U.S.-China trade war, Maersk last month raised its expectations for 2019 profit, prompting its shares to jump more than 7%.

The company on Friday published a full set of results for the July to September period, reaffirming it is on track to improve its profit margin albeit on slightly lower revenue.

The pick up in profitability is driven by capacity management and cost control, with unit costs - the cost of moving a container on global seas - down 3% in the third quarter.

"We will continue our focus on profitability and free cash flow in the fourth quarter and into 2020," Chief Executive Soren Skou said in a statement.

Maersk has in several quarters struggled to keep costs under control amid low freight rates, rising fuel prices and a slowdown in container shipping.

As Maersk shifts its focus from market share to lowering costs, it said it expected underlying growth in its ocean business to be slightly lower this year than average market growth.

© Reuters. FILE PHOTO: Truck transports a Maersk shipping container by a cargo ship at a port in Qingdao

Skou has overseen a major shift in Maersk's strategy, announced in 2016, which has included selling off its oil and gas business to focus on its container and logistics business for customers including Walmart (NYSE:WMT) and Nike (NYSE:NKE).

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.