Global shipping group Maersk slashed its growth forecasts on Wednesday as it warned that logistics and container shipping bottlenecks could worsen later this year as a result of tough Covid lockdown measures in China affecting supply chains.
The Copenhagen-based company confirmed upbeat first-quarter numbers announced last week but said global container demand would slow this year to between 1% growth and a 1% decline, compared to its previous expectation of 2-4% growth.
Maersk, a barometer for global trade, said a surge in consumer demand, pandemic-related congestion in major ports and more recently an airspace closure following Russia’s invasion of Ukraine have slowed shipments and raised freight rates.
“Further challenges arise from the ongoing lockdowns in China, and while the impact in the first quarter is limited, it may worsen the congestion environment in coming quarters as the situation develops,” Maersk said in its first-quarter earnings statement.
Maersk said revenues rose 56% to $19.3 billion year-on-year, while underlying earnings before interest, taxes, depreciation and amortisation more than doubled to $9.2 billion.
Additional Delays Expected
However, additional shipping delays, port congestions and logistics under-capacity are expected while Shanghai remains in lockdown. Maersk said Shanghai’s trucking capacity has been cut by 30% as a result of the stricter virus control rules.
According to data from Lloyd’s Register, the number of cargo ships waiting outside the ports of Shanghai and Ningbo has increased since March.
One of the world’s biggest container shippers with a market share of around 17%, Maersk also said that while consumers had spent more on goods during the pandemic rather than services such as restaurants and travel, that was likely to change.
“A reduced impact from the Covid-19 pandemic should support the global economy, but the composition of spending is likely to rebalance towards services, and sharply rising prices for some goods may lead consumers to adjust their spending plans,” the company said.
- Reuters, with additional editing by George Russell