Falling freight rates leave dent on Maersk profit margins

By Dale Benton
Weak oil prices and falling freight rates have knocked the net profit of A.P Moeller-Maersk A/S, with a significant drop within the second quarter, acco...

Weak oil prices and falling freight rates have knocked the net profit of A.P Moeller-Maersk A/S, with a significant drop within the second quarter, according to Market Watch.

The Danish company’s profit of $101million in the three months to end-June as well as a 16 percent fall in revenue to $8.86billion has fallen short of analysts’ expectations.

The result has been described as ‘unsatisfactory’ by Maersk Chief Executive Soren Skou, however cost reductions and operational optimisations have made a significant impact in mitigating the impact of ‘negative market conditions’.

Maersk Line costs are at an ‘all time low’ with a drop below $2,000 per forty-foot equivalent container unit. 

The company said average container freight rates were 24% lower year-over-year in the quarter, while the oil price was down 26%.

Freight rates declined across all trades, by the most in North America and West Central Asia, but trade in Africa, rates in Oceania and Europe had also fallen.

Supply Chain Digital's August issue is now live. 

Follow @SupplyChainD on Twitter.

Supply Chain Digital is also on Facebook. 

Share

Featured Articles

P&SC LIVE New York welcomes Dean Ocampo, ServiceNow

Dean Ocampo, Director of Products, Finance and Supply Chain at ServiceNow to speak at Procurement & Supply Chain LIVE New York

P&SC LIVE London Welcomes New Sponsor – LeanLinking

Procurement & Supply Chain LIVE London welcomes Leanlinking as the latest sponsor of the fastest-growing event in London

Procurement & Supply Chain LIVE Dubai is LIVE!

The ultimate virtual event for procurement & supply chain leaders in the Middle East and Africa, Procurement & Supply Chain LIVE Dubai returns in 2024

One Day to Go - Procurement & Supply Chain LIVE Dubai

Digital Supply Chain

Blue Yonder Thriving in Supply Chain Fulfilment

Technology

The Global P&SC Awards - Submissions Deadline Extended

Digital Supply Chain