Maersk warns trade war hit container shipping

FILE PHOTO: The Maersk Line container ship Maersk Sentosa is helped by tugs as it navigates the River Mersey in Liverpool, Britain - REUTERS

COPENHAGEN (Reuters): Danish shipping group A.P. Moller-Maersk beat third-quarter operating profit forecasts last week, but said a trade war between the United States and China had hit demand for container shipping.

Maersk, the world’s biggest container shipper, said the effect of trade tensions could reduce global container trade between 0.5 and 2% during 2019 and 2020. It said volume growth in container shipping, excluding those from Hamburg Sud, was lower than expected and unexpectedly fell by 1.9% from the previous quarter.

The company narrowed its expectation for full-year earnings before interest, tax, depreciation and amortisation (EBITDA) to $3.6 billion to $4.0 billion from $3.5 billion to $4.2 billion previously.

The former conglomerate is restructuring to focus entirely on transport and logistics and plans to step up competition with delivery companies UPS and Fedex. Maersk bought German rival Hamburg Sud in 2016, which helped it boost revenue in the quarter by 31% from a year earlier to $10.08 billion, above the $9.98 billion expected by analysts in a Reuters poll.

EBITDA totalled $1.14 billion for the quarter, compared with 1.09 billion forecast by analysts.

However, unit costs – a key parameter in the shipping industry showing how competitive prices each liner can offer its customers – rose unexpectedly by 1.5% to $1,809 per forty foot container from the previous quarter.