AP Moller-Maersk, the world’s largest ocean shipping company by fleet size, will lay off a total of 10,000 workers this year due to “a radically changed business environment.”
The company’s third-quarter revenues fell by about half, year on year.
Maersk had released 6,500 employees earlier this year and will let go of another 3,500 before January, it announced.
“Our industry is facing a new normal with subdued demand, prices back in line with historical levels, and inflationary pressures on our cost base,” CEO Vincent Clerc wrote in a statement accompanying the quarterly report.
The cost of sailing a fully loaded, 40-foot shipping container one way along eight major global routes averaged $1,406 last week, according to data service Drewry Shipping, a 54-percent plunge from a year earlier.
After posting a record profit last year, Maersk began warning early in 2023 that this year would be radically different, as foreign demand for China’s factory goods slumped, retailers were still working off old inventory, and inflation raised costs.
The post-COVID spurt would not last, the company correctly predicted.
Maersk also announced last week that its 2023 profits would come in at the low end of its predicted range of $9.5 to $11 billion.
Maersk’s share price fell more than 17 percent after the quarterly report was released.
TRENDPOST: Shipping volumes and prices returning to pre-COVID levels are a signpost that any global post-COVID recovery is over. There will be no more booms to haul the world’s economy out of its current slump. And, we question the shortsightedness of the ocean shipping magnets who sharply increased the number of ships they bought during the COVID War when demand for shipped products was high… and now they are being burdened down with stagnant, rotting fleets.