Executive Briefings

Maersk Predicts Stronger Trade in Near Future

The world's biggest container shipping line by market share is predicting that the world will come out of the funk induced by the financial crisis in the coming two years.

The recession in many worldwide economies that followed the 2008 crisis caused trade to collapse around the world. The continuing recession in Europe and slowdown in China and other big developing economies this year have led the World Trade Organization and others to downgrade their expectations for global trade this year and next. The WTO expects global trade to grow by just 2.5 percent this year.

But Maersk Line said it believed the downturn in trade had bottomed out and predicted demand for global containers would grow by four to six percent in 2014 and 2015, up from recent forecasts of two to three percent for this year.

"We believe we've reached the bottom of the cycle," Jakob Stausholm, Maersk Line's chief financial officer, told investors and analysts in Copenhagen recently.

Maersk is one of the best corporate indicators of global trade as it carries 15 percent of all seaborne containers. In recent years it has been weighed down by the weakness of Asia-Europe trade, but in a major bet on the future of global trade it has started taking delivery of the first of the world's biggest container ships, the Triple E class.

Global container demand collapsed after the financial crisis, dropping by close to 16 percent at the start of 2009. But Stausholm said such a decline was exceptional and that the present growth rate of two-three percent had historically represented the trough in the shipping industry.

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The recession in many worldwide economies that followed the 2008 crisis caused trade to collapse around the world. The continuing recession in Europe and slowdown in China and other big developing economies this year have led the World Trade Organization and others to downgrade their expectations for global trade this year and next. The WTO expects global trade to grow by just 2.5 percent this year.

But Maersk Line said it believed the downturn in trade had bottomed out and predicted demand for global containers would grow by four to six percent in 2014 and 2015, up from recent forecasts of two to three percent for this year.

"We believe we've reached the bottom of the cycle," Jakob Stausholm, Maersk Line's chief financial officer, told investors and analysts in Copenhagen recently.

Maersk is one of the best corporate indicators of global trade as it carries 15 percent of all seaborne containers. In recent years it has been weighed down by the weakness of Asia-Europe trade, but in a major bet on the future of global trade it has started taking delivery of the first of the world's biggest container ships, the Triple E class.

Global container demand collapsed after the financial crisis, dropping by close to 16 percent at the start of 2009. But Stausholm said such a decline was exceptional and that the present growth rate of two-three percent had historically represented the trough in the shipping industry.

Read Full Article