Shipping line Maersk delivered its first quarter results for 2024, which show a strong recovery compared to the last quarter. The company’s results are driven by the good performance with terminals, high demand and the ongoing Red Sea crisis.
Maersk’s CEO Vincent Clerc says these results were “precisely as we expected.”
“Demand is trending towards the higher end of our market growth guidance and conditions in the Red Sea remain entrenched. This not only supported a recovery in the first quarter compared to the previous quarter, but also provide an improved outlook for the coming quarters, as we now expect these conditions to stay with us for most of the year,” says Clerc.
The importance of the Red Sea in logistics
The Red Sea is a crucial corridor connecting the Mediterranean Sea, Indian Ocean and beyond. Its strategic location gives shippers access to Europe, Asia, and Africa. The Red Sea route is the natural sailing route between these regions.
ALSO READ: Red Sea crisis: What is it doing to your business?
Dealing with challenges
Ocean results were affected by the disruptions in the Red Sea, which led to higher market rates and increased costs. Despite these challenges, strong volumes, high capacity utilization, and a continued focus on cost control contributed to improved results compared to the previous quarter.
Logistics & Services experienced notable growth in volumes, but margins remained unsatisfactory due to underutilization in certain warehouses and short-term difficulties in implementing new customer contracts within the North American ground freight business.
Terminals began the year with solid results, driven by robust volume growth. Effective cost management and high productivity contributed to improved margins.
Last month, Locate2u reported Maersk applied for a UK operating license.
Why does the UK license application matter?
A new cargo operator in the market would potentially increase the available air freight capacity. This is particularly beneficial for businesses needing to ship goods quickly and efficiently, as more options often lead to better service levels.
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Photo Credit: Canva
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About the author
Sharl is a qualified journalist. He has over 10 years’ experience in the media industry, including positions as an editor of a magazine and Business Editor of a daily newspaper. Sharl also has experience in logistics specifically operations, where he worked with global food aid organisations distributing food into Africa. Sharl enjoys writing business stories and human interest pieces.
