Container Carriers Brace for Coronavirus Hit to Trade

0 comments

Container Carriers Brace for Coronavirus Hit to Trade

March 20, 2020 by Reuters

containership
Photo: By donvictorio / Shutterstock

By Vera Eckert and Stine Jacobsen FRANKFURT/COPENHAGEN, March 20 (Reuters) – Leading container shipping firm A.P. Moller-Maersk scrapped its 2020 earnings forecast on Friday, while rival Hapag-Lloyd warned of slowing growth until at least June, as the coronavirus pandemic takes a heavy toll on global trade.

The container shipping industry, a bellwether for international trade, has been blown off course by the new virus, which brought parts of China to a standstill before spreading around the world, leading container lines to re-route cargoes and reduce calls to Chinese ports.

Despite lower volume growth, Maersk still expects to make higher first-quarter earnings than a year ago thanks to savings and steps to offset the higher cost of low-sulfur fuel, it said, sending its battered shares more than 7% higher by 1045 GMT.

However, the Danish company, which handles one in every five containers shipped by sea worldwide, scrapped its 2020 earnings guidance due to uncertainty over the affects of the pandemic.

Smaller German rival Hapag-Lloyd said the outbreak would curb business growth at least until the middle of the year, but that falling fuel costs should help lessen financial impact on the company, which has set aside funds to help cope with the crisis.

Analysts said they were reassured that Maersk was keeping its dividend and share buy-back program – shareholder rewards that have been sacrificed by many other companies.

Hapag shares also rose around 7% in a rallying stock market after reporting a jump in 2019 profit and proposing a higher dividend.

Hapag CEO Rolf Habben Jansen said the impact of the pandemic was impossible to determine for the time being, but the company was preparing for a blow to trade.

But there could be upside if the crisis is followed by a sudden restocking, he told reporters. In addition, he said, it was positive that order books for new vessels were historically low and few ships were idle.

While China, where the virus emerged, and other Asian countries have started to recover probably faster than some had expected, other continents are now more affected.

Analysts at Fearnley Securities warned container shipping volumes probably would weaken in the second and third quarter as the Western hemisphere becomes the focus of the outbreak.

($1 = 0.9282 euros) (Reporting by Vera Eckert in Frankfurt, Stine Jacobsen and Nikolaj Skydsgaard in Copenhagen, editing by Jason Neely and Mark Potter)(c) Copyright Thomson Reuters 2019.

Leave a Reply

SSCP   CAS-002   9L0-066   350-050   642-999   220-801   74-678   642-732   400-051   ICGB   c2010-652   70-413   101-400   220-902   350-080   210-260   70-246   1Z0-144   3002   AWS-SYSOPS   70-347   PEGACPBA71V1   220-901   70-534   LX0-104   070-461   HP0-S42   1Z0-061   000-105   70-486   70-177   N10-006   500-260   640-692   70-980   CISM   VCP550   70-532   200-101   000-080   PR000041   2V0-621   70-411   352-001   70-480   70-461   ICBB   000-089   70-410   350-029   1Z0-060   2V0-620   210-065   70-463   70-483   CRISC   MB6-703   1z0-808   220-802   ITILFND   1Z0-804   LX0-103   MB2-704   210-060   101   200-310   640-911   200-120   EX300   300-209   1Z0-803   350-001   400-201   9L0-012   70-488   JN0-102   640-916   70-270   100-101   MB5-705   JK0-022   350-060   300-320   1z0-434   350-018   400-101   350-030   000-106   ADM-201   300-135   300-208   EX200   PMP   NSE4   1Z0-051   c2010-657   C_TFIN52_66   300-115   70-417   9A0-385   70-243   300-075   70-487   NS0-157   MB2-707   70-533   CAP   OG0-093   M70-101   300-070   102-400   JN0-360   SY0-401   000-017   300-206   CCA-500   70-412   2V0-621D   70-178   810-403   70-462   OG0-091   1V0-601   200-355   000-104   700-501   70-346   CISSP   300-101   1Y0-201   200-125  , 200-125  , 100-105  , 100-105  , CISM   NS0-157   350-018  , NS0-157   ICBB  , N10-006 test  , 350-050   70-534   70-178   220-802   102-400   000-106   70-411  , 400-101   100-101  , NS0-157   1Z0-803   200-125  , 210-060   400-201   350-050   C_TFIN52_66  , JN0-102  , 200-355   JN0-360   70-411   350-018  , 70-412   350-030   640-916   000-105   100-105  , 70-270  , 70-462   300-070  , 300-070   642-999   101-400   PR000041   200-101  , 350-030   300-070  , 70-270  , 400-051   200-120   70-178   9L0-012   70-487   LX0-103   100-105  ,