Container rates drop to "unsustainable levels"

The global container shipping market faces overcapacity in the coming years and the rates paid by customers have fallen to an unsustainable level, Maersk CEO Vincent Clerc told the group's annual meeting of shareholders.

German rival Hapag-Lloyd (HLAG.DE) ,said the global oversupply of container ships and the crisis in the Red Sea will force it to cut costs in 2024, adapting sailings and ports following an 83% fall in net profit.

Container rates jumped in December and early January as vessel attacks in the Red Sea forced companies to redirect ships away from the Suez Canal to a much longer journey around Africa, but have since faded as available capacity still exceeds demand.

An influx of new container ships last year added 9% to the industry's global capacity, which is expected to increase by another 11% this year and a further 7% in 2025, Maersk said.