The uncertainty around the impact of the COVID-19 pandemic has two of the world’s largest container shipping companies—AP Moller-Maersk and Hapag-Lloyd—lowering expectation for 2020.
Releasing a Q1 trading update Maersk said that while operations continued to run as normal due to the uncertainties related to outlook it had decided to suspend its EBITDA guidance for 2020 until there was more clarity on market developments and financial implications.
“Because of the current situation with high uncertainties related to global container demand due to the COVID-19 pandemic and the measures being taken by governments to contain the outbreak, we have chosen to suspend our 2020 full year guidance on earnings but will as soon as we have more clarity return with an outlook for 2020,” stated AP Moller-Maersk CEO Søren Skou. “Ensuring the health and well-being of our employees and supporting our customer’s needs remain our number one priority.”
German shipping major Hapag-Lloyd said it also expects a difficult year ahead that would result in necessary fleet adjustments and lower earnings.
According to the carrier, the forecast for 2020 is subject to considerably higher uncertainties than normal, particularly due to the coronavirus outbreak. After a decent start of 2020, global container volumes will be impacted by the global coronavirus crisis, and the magnitude of that cannot be determined right now.
“2020 will be a very unusual year after we have seen that due to the coronavirus outbreak conditions in many markets have changed very quickly over the last weeks. After the initial shock, markets in China and other Asian Countries have started to recover probably faster than many feared – but now also the other continents are impacted, and the effects of that will be significant,” said Rolf Habben Jansen, CeO of Hapag-Lloyd AG.
“We will in the upcoming weeks and months mainly focus on the three things that matter most to us: the safety and health of our people, keeping the supply chains of our customers flowing and taking precautionary financial measures to weather the storm if it lasts longer than anticipated,” he added.
“Hapag-Lloyd anticipates that transport capacity deployments may have to be adjusted in light of the coronavirus in the coming months to cope with lower demand,”the company said in its audited business results for 2019.
“The extent of the coronavirus outbreak cannot be accurately predicted, but Hapag-Lloyd expects that it will have an impact on the development of earnings at least in the first half of 2020.”