From Breakingviews - Maersk recession pain could yet get more acute
of EBITDA in the three months ending September, beating analysts’ expectations, but also warned that a global recession will drive demand for containers down 2% to 4% in 2022, worse than the minus 1% to plus 1% Chief Executive Soren Skou previously predicted. The gloomy outlook is a reversal of fortunes for Maersk, which enjoyed record operating profit when supply chain bottlenecks drove up the average cost of shipping one forty foot container from A to B to $11,000 during the pandemic.
They have now fallen below $4,000, and a recession could drive them down further.. Before Wednesday’s 5% share price fall, the value of the company’s stock was off 30% since the beginning of the year. But there could be worse to come as the shaky global outlook creates a vicious circle. Falling freight rates and volumes could encourage Maersk’s clients, who have flexible contracts, to scale back on their shipping orders.
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