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Maersk warns of 20 – 25% drop in volumes in Q2

Operator of the world’s largest container line, AP Moller - Maersk, expects to see a 20 – 25% drop in volumes across its businesses in the second quarter of 2020 due to the impact of the COVID-19 pandemic.

In the Maersk Q1 results statement ceo Soren Skou said: “Looking into Q2 2020, visibility remains low as a result of the COVID-19 pandemic. We continue to support our customers in keeping their supply chains running, however as global demand continues to be significantly affected, we expect volumes in Q2 to decrease across all businesses, possibly by as much as 20-25%.”

Due to the impact of demand on the mainline east – west trades Maersk blanked 90 sailings in Q1 leading to a 3.5% reduction deployed capacity due to idle vessel. In Q1 volumes declined 5.7% China by the almost complete halt in Chinese exports in February. The Asia – Europe trade saw a 16% drop in volumes as a result.

As lockdowns due to the pandemic spread from China across the globe in Q2 the container line expects to blank close to 140 sailings.

Looking ahead Mearsk said: “While the outlook is very uncertain, it is expected that container demand will decline in 2020 compared to 2019. At present, it is difficult to predict the timing and the shape of the recovery in global trade volumes with confidence, as it will be determined by the interplay between the path of the virus and government policies in relation to the economy.

“As a reference point, WTO projects global merchandised trade to decline by between 13-32% in 2020, and the IMF expects a decrease of 11% (goods and services) but with a significant downside risk.”

Despite the impact of COVID-19 in the first quarter Maersk reported 23% increase in EBITDA to $1.5bn compared to the same period a year earlier, and a slight increase in revenues in Q1 this year to $9.57bn compared $9.54bn in the same period in 2019.

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