Maersk on Wednesday said healthier-than-expected container volumes has led it to upgrade its second-quarter outlook, with volumes now expected to be down 15 to 18 percent from the 2019 period. That compares to an initial outlook of a 20 to 25 percent decline the carrier gave May 13 as the COVID-19 pandemic wreaked havoc on the global supply chain.
In a statement, the largest global container line said it expected the slightly milder volume decline would result in Q2 operating earnings “slightly above” its first-quarter 2020 results and better than its second-quarter 2019 performance. Maersk will release its Q2 2020 results Aug. 19.
“We have been able to navigate well in a very difficult second quarter, adjusting capacity to demand to maintain high utilization of our network and managing our cost across the company,” A.P. Møller-Maersk CEO Søren Skou said in the statement. The company reported a $197 million profit in the first quarter of 2020 after a 5 percent volume drop and higher fuel prices necessitated by the International Maritime Organization’s low-sulfur rule.
IHS Markit, parent company of JOC.com, on May 20 downgraded its outlook for international trade volumes in 2020, forecasting a 10.1 percent year-over-year decline after predicting a 2.1 percent increase as recently as February. The revised forecast expects container volumes to rebound by 10.3 percent and 4.4 percent in 2021 and 2022, respectively, before settling into a low-single digit growth clip.
Container volumes across the board will fall between 15 to 25 percent in the second quarter, depending on the carrier, Neil Glynn, European transport equity research at Credit Suisse, told JOC Uncharted. He forecasts container volumes in the second half of the year will be down 10 percent compared with 2019.
Most, if not all, regions will see a year-over-year decline in container trade in 2020, with regions supporting the consumption of developed countries seeing the sharpest drops, Nilesh Tiwary, manager at Drewry Maritime Financial Research, told JOC Uncharted. Container volume this year will fall 8 percent year over year in 2020, and then rebound by 13 percent in 2021, he said.