Maersk has announced that it intends to embark on a significant retrenchment exercise following bear market results contained in its third-quarter (Q3) financial report.
The Danish line, once the global shipping leader before it was overtaken by MSC’s rapid container capacity expansion, is said to be considering laying off at least 10 000 staff.
The news comes as Maersk’s Ebit (earnings before interest and taxes) for Q3 is believed to be $27 million in deficit.
Compared to last year’s $8.7 billion Ebit results for the same year, Maersk is clearly facing serious headwinds as muted uptake continues to impact capacity, leading lines to blank schedule sailings while rates continue to plummet.
A statement by the carrier said: “AP Moller–Maersk’s financial results for Q3 of 2023 were in line with expectations in a difficult market environment, with rates well off their 2022 peak and tested by the increase of capacity in ocean.
“Revenue was $12.1 billion compared to $22.8bn in Q3 2022, with an Ebit margin at 4.4%, impacted by lower freight rates and lower volumes.”
Maersk’s CEO Vincent Clerc said: “Our industry is facing a new normal, with subdued demand, prices back in line with historical levels, and inflationary pressure on our cost base.
“Since the summer, we have seen overcapacity across most regions triggering price drops and no noticeable uptick in ship recycling or idling.
“Given the challenging times ahead, we accelerated several cost and cash containment measures to safeguard our financial performance.
“While continuously streamlining our organisation and operations, we remain dedicated to our strategy of fulfilling our customers’ diversified supply chain needs while pursuing growth opportunities across our terminals business and logistic services.”
