Danish container shipping major Maersk has upgraded its full-year 2024 guidance amid continued strong container market demand and the disruption caused by the ongoing crisis in the Red Sea.

The company now expects underlying EBITDA of US$7-9 billion and EBIT of US$1 to 3 billion (previously US$4 to $6 billion and US$-2 to $0 billion, respectively), and free cash flow of at least US$1 billion (previously at least US$-2 billion).

“On the back of continued strong container market demand and the disruption caused by the ongoing crisis in the Red Sea, A.P. Møller – Mærsk A/S (APMM) now also sees signs of further port congestions, especially in Asia and the Middle East, and additional increase in container freight rates. This development is gradually building up and is expected to contribute to a stronger financial performance in the second half of 2024,” Maersk said.

Trading conditions remain subject to higher-than-normal volatility given the unpredictability of the Red Sea situation and the lack of clarity of future supply and demand.

Vessel rerouting has resulted in significant congestion in Mediterranean and Asia ports, including Singapore.

Read more: PSA reactivates berths and yards at Keppel Terminal to mitigate congestion

As a result, Maersk said in a customer advisory that it is experiencing substantial delays in vessel schedules.

“This congestion has resulted in extended waiting times at various ports, impacting our ability to maintain regular schedules,” Maersk said, announcing blank voyages for the AE11 and AE15 services for vessels MSC Amelia and MSC Mirjam.

According to the freight rate benchmarking platform Xeneta, ocean freight container shipping spot rates are set to exceed the level seen at the height of the Red Sea crisis.

Xeneta expects average spot rates from the Far East to the US West Coast to reach US$5,170 per FEU in June, which would surpass the Red Sea crisis peak of US$4,820 seen in February. This is an increase of 57% during May and the highest spot rates have been on this trade for 640 days, Xeneta said.

From the Far East to the US East Coast, spot rates are expected to reach US$6,250 per FEU, an increase of 50% since 29 April.

Spot rates are also set to exceed the Red Sea crisis peak on the Far East to North Europe trade, reaching US$5,280 per FEU compared to US$4,839 in mid February. This will be the highest rates have been on this trade for 596 days and an increase of 63% since 29 April, Xeneta said.

It is a similar story on the Far East to Mediterranean trade where spot rates are expected to edge past the Red Sea crisis peak of US$5,985 per FEU on 16 January to reach US$6,175, the highest rates have been on the trade for 610 days.

Danish container shipping major Maersk has upgraded its full-year 2024 guidance amid continued strong container market demand and the disruption caused by the ongoing crisis in the Red Sea.

The company now expects underlying EBITDA of US$7-9 billion and EBIT of US$1 to 3 billion (previously US$4 to $6 billion and US$-2 to $0 billion, respectively), and free cash flow of at least US$1 billion (previously at least US$-2 billion).

“On the back of continued strong container market demand and the disruption caused by the ongoing crisis in the Red Sea, A.P. Møller – Mærsk A/S (APMM) now also sees signs of further port congestions, especially in Asia and the Middle East, and additional increase in container freight rates. This development is gradually building up and is expected to contribute to a stronger financial performance in the second half of 2024,” Maersk said.

Trading conditions remain subject to higher-than-normal volatility given the unpredictability of the Red Sea situation and the lack of clarity of future supply and demand.

Vessel rerouting has resulted in significant congestion in Mediterranean and Asia ports, including Singapore.

Read more: PSA reactivates berths and yards at Keppel Terminal to mitigate congestion

As a result, Maersk said in a customer advisory that it is experiencing substantial delays in vessel schedules.

“This congestion has resulted in extended waiting times at various ports, impacting our ability to maintain regular schedules,” Maersk said, announcing blank voyages for the AE11 and AE15 services for vessels MSC Amelia and MSC Mirjam.

According to the freight rate benchmarking platform Xeneta, ocean freight container shipping spot rates are set to exceed the level seen at the height of the Red Sea crisis.

Xeneta expects average spot rates from the Far East to the US West Coast to reach US$5,170 per FEU in June, which would surpass the Red Sea crisis peak of US$4,820 seen in February. This is an increase of 57% during May and the highest spot rates have been on this trade for 640 days, Xeneta said.

From the Far East to the US East Coast, spot rates are expected to reach US$6,250 per FEU, an increase of 50% since 29 April.

Spot rates are also set to exceed the Red Sea crisis peak on the Far East to North Europe trade, reaching US$5,280 per FEU compared to US$4,839 in mid February. This will be the highest rates have been on this trade for 596 days and an increase of 63% since 29 April, Xeneta said.

It is a similar story on the Far East to Mediterranean trade where spot rates are expected to edge past the Red Sea crisis peak of US$5,985 per FEU on 16 January to reach US$6,175, the highest rates have been on the trade for 610 days.