Moller-Maersk, the world’s largest liner, said in its second-quarter report that it expected a slowdown in container shipping demand amid economic uncertainty, weakening consumer confidence, and global supply chain congestion.
The global container shipping market volume for the second quarter decreased by 2.3% compared to the second quarter of 2021. Geopolitical uncertainty and higher inflation via higher energy prices continue to weigh on consumer sentiment.
7.4% fewer containers were loaded onto Maersk ships in the second quarter compared to the same period in 2021. At the same time, the company reported record earnings for the quarter. Its revenue grew by 52% to $21.7 billion, and EBITDA (earnings before interest, taxes, depreciation, and amortization) more than doubled to $10.3 billion.
Despite the deterioration in forecasts for shipping demand, the company expects good results for 2022. Last year, Maersk’s financial results were at historic highs.
Spot and contract rates - multidirectional movement
The average freight rate for the transportation of a loaded 40ft container in the second quarter of 2022 was 64% higher than a year before and amounted to USD 4.98 thousand. At the same time, spot rates in the second quarter decreased significantly compared to the peak values at the beginning of the year, while rates under long-term contracts increased.
According to market experts, container lines have taken advantage of the shortage of capacity to encourage customers to enter into long-term contracts at higher rates. In particular, Maersk transported 1.9 million FEU for the past quarter under long-term contracts concluded for more than two years - the share of the contractual business in backbone services increased to 72%.