A.P. Moller–Maersk: Strong freight market, but risks remain

According to the company's second-quarter report, market conditions have been supported by export demand, port congestion and ongoing disruptions affecting global shipping routes. In August, Maersk revised its 2026 underlying EBITDA guidance to USD 10.5–12.5bn. The guidance reflects management’s current expectations and remains dependent on developments in freight rates, demand and market conditions. Recent operating metrics may also suggest that market conditions remained supportive during the second quarter, with the Ocean business reporting an average freight rate of approximately USD 2,746 per FFE (forty-foot equivalent) and vessel utilization of 96% (JPMorgan). Further stating that a USD 100/FFE change in freight rates corresponds to an estimated USD 700m impact on full-year EBIT, illustrating the company's sensitivity to developments in freight rates.

Market assessments remain mixed, with some financial institutions raising their price targets following continued strength in freight rates and earnings expectations, while others maintain a more cautious view. At the same time, Maersk continues to invest significantly in its business, including infrastructure and operational capabilities. While these investments are intended to support the company's long-term competitiveness and capacity, although the timing and extent of any benefits remain uncertain and represent a substantial use of capital.

Looking ahead, the sustainability of the current freight-rate environment remains uncertain. A gradual normalization of Suez Canal traffic, easing port congestion and continued deliveries of new container vessels could increase effective market capacity. If these developments coincide with slower demand growth, freight rates and industry profitability could come under pressure. Conversely, continued supply-chain disruptions, resilient demand or capacity constraints could contribute to keeping freight rates elevated for longer. As a result, the future development of freight rates and Maersk's earnings will depend on how these factors evolve. 

The container shipping market continues to exhibit elevated freight rates despite ongoing fleet expansion. Drewry's World Container Index stood at approximately USD 4,473 per 40-foot container at the end of August, while rates on major Asia-US trade routes remained substantially above historical averages. The persistence of elevated rates alongside continued vessel deliveries indicates that nominal fleet growth has not translated fully into additional effective capacity.

Vessels operating on longer routes, including diversions around the Cape of Good Hope, may complete fewer voyages over a given period than vessels transiting through the Suez Canal. Port congestion and operational disruptions can also reduce the availability of vessels and equipment within the transport network. These factors can limit the effective capacity available to shippers despite growth in the global fleet.

This has contributed to freight rates remaining elevated despite the addition of new vessels. On the demand side, Mærsk has stated that it expects global container demand to grow by around 4% in 2026, with Chinese exports remaining an important contributor to trade volumes. Continued demand growth could therefore support freight rates, while further additional fleet capacity or weaker demand could result in lower freight rates.

Looking ahead, freight-rate developments remain uncertain and will depend on several factors, including demand growth, fleet additions, the normalization of shipping routes and broader economic conditions. While ongoing supply-chain disruptions and resilient demand could support freight rates, weaker trade activity, increased vessel capacity or a normalization of shipping routes could result in lower freight rates and negatively affect industry profitability. As a result, future freight rates and Maersk's earnings remain uncertain and may develop differently from current expectations.

Geopolitical developments continue to influence container shipping markets through higher operating costs, changes in trade flows and adjustments to shipping routes. The impact on freight rates and earnings, however, depends on the nature and duration of each disruption.

Disruptions in the Red Sea have led many vessels on Asia-Europe trade lanes to avoid the Suez Canal and instead sail around the Cape of Good Hope, increasing voyage distances and transit times. Developments in the Strait of Hormuz have also increased costs for shipping operators through higher insurance and fuel expenses, as well as potential changes in regional cargo flows. Although only a fraction of global container volumes passes through the Strait of Hormuz, Maersk has reported an increase in costs of around USD 500 million per month due to the disruption. The company has stated that it has so far been able to pass these additional costs on to customers through higher freight rates, although the extent to which this can continue may depend on future market conditions and competitive dynamics.

Geopolitical disruptions can therefore affect Maersk's earnings through operating costs, transport volumes and changes in market capacity and freight-rate dynamics. While market conditions continued to support freight rates in the second quarter, the contribution of individual factors is difficult to isolate. At the same time, Maersk has reported increased traffic through the Suez Canal after several years of disruption, which could gradually reduce voyage distances and improve vessel productivity if the trend continues. Freight rates and profitability will ultimately depend on the development of demand, capacity and geopolitical conditions.

Freight rates remain supported by resilient container demand, ongoing disruptions to global trade routes and congestion in parts of the network. Strong exports from Asia, including continued Chinese export activity, could support cargo volumes and help absorb additional vessel capacity although weaker trade activity could reduce demand for container shipping services. If disruptions persist and demand remains robust, effective capacity could remain constrained and support freight rates.

At the same time, continued fleet deliveries are increasing nominal container capacity. A gradual return to Suez Canal routing would also improve vessel productivity and increase the effective supply available to the market, while the industry's sizeable orderbook points to further capacity growth over the coming years. These factors could place downward pressure on freight rates if capacity growth outpaces demand.

The balance between these factors is likely to determine the direction of freight rates. Continued disruption, strong demand and persistent congestion could keep effective capacity relatively constrained, whereas faster normalization of shipping routes, easing congestion or weaker demand could increase available capacity and weigh on rates.

Given Maersk's significant exposure to freight rates, changes in market pricing can have a material impact on earnings. The extent to which additional capacity is absorbed by global container demand, and the pace at which current operational constraints normalize, will therefore remain important factors for the company's earnings development.