A.P.Moeller-Maersk may struggle to make a profit this year amid rising fuel costs and the US-China trade war.
Maersk, the biggest container shipping company in the world, has already lost almost a third of its market value this year as the industry struggles with a variety of factors, including falling demand.
The company announced earlier this week that it would scale back its service between Asia and North Europe.
A.P. Moller – Maersk share price graph: Currency = DKK 7,768.00 as of 2:18 PM on July 12, 2018
See how Maersk is seeking to improve to improve its logistics by reading a Port Technology technical paper
In an interview with Bloomberg, Corrine Png, Founder and CEO of Crucial Perspective — a Singapore-based research provider on transport, commented that Maersk’s valuations over the next few months could be impacted by investors avoiding shipping stocks until ocean carriers start removing excess capacity.
She said: “It’s harder for Maersk to pass on the higher bunker fuel costs effectively compared to last year, raising the risk that Maersk can only be marginally profitable, at best, or even turn loss-making for the full financial year.
“Maersk is the second-largest carrier in the Far East-North America trade lane, with 15% market share, so falling China exports to the US due to tariffs will hurt Maersk’s financial results going forward.”