Supply and demand imbalance in shipping market, Maersk plans to lay off 10,000 people

According to news on November 3, Maersk released its third quarter financial report for 2023. The financial report showed that third quarter revenue was US.13 billion, a year-on-year decrease of 4.4%, and the previous estimate was US.54 billion. Operating EBIDTA in the third quarter was US.88 billion, compared with the estimate of US.89 billion.

In addition, Maersk announced that it will lay off about 10,000 people to reduce costs. Maersk expects to save US0 million through the cost reduction plan.

It is understood that Maersk controls about 17% of the world's container trade and is considered a bellwether for global trade.

Since the beginning of this year, falling container freight rates and weakening demand have hit the global shipping industry, and analysts predict that this situation may continue until 2026.

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Shipping business is one of Maersk's core businesses, accounting for more than 70% of total revenue. In the third quarter, Maersk's ocean shipping business revenue fell to US.897 billion from US.018 billion in the same period last year.

In addition, Maersk's logistics and service business revenue also decreased from US.182 billion in the same period last year to US.517 billion, and terminal business revenue decreased by approximately US8 million from last year to US9 million.

In the past two years, freight rates in the shipping industry have peaked. Coupled with transportation capacity constraints and other reasons, the loading rate of ships has also remained at a high level. However, as freight rates gradually decline in 2022, the industry's prosperity will take a sharp turn.

Industry insiders said that there is currently a serious imbalance between supply and demand in the global shipping market. The global economy is still affected by high inflation, high interest rates, and geopolitical conflicts. Coupled with the slow destocking process, the shipping market will still face greater challenges.