Things seem to be turning around for the world’s ocean carriers. On Wednesday, the CEO of AP Moeller – Maersk announced that container volumes may be getting closer to normal, and could see a recovery next year.
In an interview on Bloomberg TV, Soeren Skou predicted that volumes could return to 2019 levels at the beginning of 2021. He called it a ‘U shaped recovery’.
The carrier could end up making $1.5 billion more in profit than previously expected. Maersk cut operating costs by 16% in the second quarter, while rates rose 4.5%. The company provided guidance (meaning they gave an estimate of earnings for the current quarter) for the first time since March.
Of course, the risk of a second lockdown still looms. ‘Global demand growth for containers is still expected to contract in 2020 due to Covid-19 and for Q3 2020 volumes are expected to progressively recover with a current expectation of a mid-single digit contraction,’ the company said on Wednesday.
Maersk predicts that volumes will be down by a single digit amount in the third quarter, in contrast to a 15% drop from April through June. But it wasn’t the only carrier to indicate that things are improving. Last week, Haypag-Lloyd forecasted that volumes could fall by 5% this year, not 10%, which the company had predicted earlier. D/S Norden is predicting that rates for dry bulk cargo will increase ‘based on an expectation of a gradually improving macroeconomic environment’, and raised its forecast of quarterly earnings accordingly.
This isn’t the only hopeful sign for logistics. Trailer orders are coming back online, FTR announced on Wednesday. DAT reported last week that spot rates are still rising, albeit with some uncertainty mixed in. On Wednesday, the World Trade Organization said that container throughput was higher than expected, though it remains ‘deeply depressed’.
Last week, new unemployment claims fell below 1 million for the first time since March. The next report comes out tomorrow, and it will be interesting to see which direction new claims go in. Whether Americans have jobs to go to or not will impact demand, which in turn will either support rising freight volumes or pull the rug out from freight conditions.