A.P. Moller-Maersk predicts strong shipping demand but no Suez Canal route return until 2025 amid Red Sea attack threats.
A.P. Moller-Maersk anticipates robust global shipping demand in the coming months, but it will not return to using the Suez Canal until well into 2025 due to ongoing threats from Red Sea attacks.
Recent assaults on vessels in the Red Sea by Iran-aligned Houthi militants have disrupted this critical east-west trade route, resulting in extended rerouting, increased freight rates, and congestion at Asian and European ports.
Chief Executive Vincent Clerc stated, “There are no signs of de-escalation, and it is not safe for our vessels or personnel to go there. Our expectation at this point is that it will last well into 2025.”
Despite these challenges, Maersk reported strong demand in the third quarter, particularly from exports in China and Southeast Asia, and no signs of volume slowdowns from Europe or North America. Analysts noted that the company remains optimistic about future container freight demand.
Sydbank analyst Mikkel Emil Jensen commented on Maersk’s outlook, stating that management is bullish regarding the near future, highlighting good demand for container freight. Following this announcement, Maersk’s shares rose by 6.4% by 1253 GMT.
While some investors anticipate a resumption of Maersk’s suspended share buyback program, Jensen added that a decision on this matter had not yet been made.
Clerc brushed aside concerns regarding the potential impacts of the upcoming U.S. election and possible trade tariffs on the global freight market, asserting that none of the candidates seem inclined to slow down economic activity. “As long as the economy seems strong and consumption is strong, there will be continued strong demand for container traffic,” he explained.
In addition, Maersk confirmed robust preliminary third-quarter earnings, released on October 21, and raised its full-year forecasts, citing solid demand and the ongoing disruptions affecting shipping in the Red Sea. The company remains committed to navigating these challenges while maintaining strong service levels for its customers.
