The global container shipping industry continues to face significant pressure as freight rates decline, fuel costs escalate, and the supply of new vessels continues to increase. Despite continued growth in international cargo demand, shipping companies’ profit margins are shrinking noticeably.
In the first quarter, Maersk recorded a loss in its container shipping segment as global freight rates continued to fall. According to the company, overcapacity in its fleet and sharply rising fuel costs are creating prolonged pressure on operations.
Speaking at the earnings call, CEO Vincent Clerc stated that the direct impact from tensions in the Middle East remains limited as the region accounts for only a small proportion of Maersk’s total shipping output. However, the indirect impact from the fuel market is more significant, with marine fuel prices increasing by nearly two-thirds in just one month.
With fuel prices approaching $1,000 per ton, Maersk reports additional costs of nearly $500 million per month. The shipping company stated it cannot absorb the entire increase and is forced to adjust fuel surcharges for customers, despite implementing numerous cost control measures across its system.
In the first quarter, Maersk’s operating costs per unit of cargo decreased by approximately 7%. However, this reduction was insufficient to offset the 14% drop in container freight rates during the same period.
According to Maersk, the global container market remains under pressure from the continuous delivery of new vessels. This is considered one of the main reasons for the continued decline in freight rates on many routes.
Despite the challenging business environment, Maersk’s cargo volume increased by more than 9% in the first quarter and recorded growth in most of its operating regions. Exports from China are showing a more positive recovery compared to the previous quarter. The company maintains its forecast for global container market volume growth this year at 2–4%.
In parallel with its long-term investment strategy, Maersk has ordered eight additional container ships with a capacity of 18,600 TEUs, expected to be delivered between 2029 and 2030, to support its fleet modernization plan. The utilization rate of its existing fleet increased to 96% in the first quarter, although six of the company’s ships are still stranded in the Persian Gulf.
Besides shipping, the logistics and port operations segments (AMP) helped offset some of the decline in the container segment. At the end of the first quarter, the shipping segment recorded a loss of $192 million before interest and taxes (EBIT), while the consolidated EBIT for the entire group reached $340 million, recording revenue that fell below $6.7 billion.
Maersk maintains its full-year financial forecasts as published before the regional conflict erupted. However, the company believes that future business results will continue to be impacted by market volatility, particularly fuel costs. According to the shipping company, container shipping may soon return to the Red Sea and Middle East regions, but pressure from the fuel market is likely to persist for several months.
