Maersk Raises Forecast Amid Port Congestion and Freight Rate Surge

AP Moller-Maersk A/S (APMM) is facing port congestion and higher container freight rates due to strong demand and disruptions in the Red Sea. Maersk has raised its full-year 2024 guidance, expecting higher underlying EBITDA and EBIT, now at $7-9 billion and $1-3 billion, respectively, up from the previous guidance of $4-6 billion and $-2-0 billion. The company also anticipates free cash flow of at least $1 billion, a positive change from the previous forecast of at least -$2 billion.

The port congestion, particularly in Mediterranean and Asian terminals, has caused delays in shipping schedules, affecting Maersk’s ability to maintain regular services. Since November, liners have been rerouting around the Cape of Good Hope due to conflicts in the Red Sea, leading to longer journeys and increased freight rates despite a rise in new ship deliveries. Maersk acknowledges the volatility of trading conditions due to the unpredictable situation in the Red Sea and uncertain supply and demand dynamics.

Maersk plans to release its second-quarter interim results on August 7, 2024. Despite the challenges posed by port congestion and disruptions in the Red Sea, the company remains optimistic about its financial performance in the second half of the year. Trade conditions continue to be uncertain, and Maersk emphasizes the need for caution in navigating these challenges and ensuring operational stability.

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