In a sign that the global economy is in the midst of a severe downturn, the shipping giant Maersk revealed that they plan to reduce their workforce by 10,000 workers after they revealed their profits were down by massive margins, in a sign that international trade and the purchasing of goods is greatly minimizing.
gCaptain, an outlet on all-things naval and shipping, reported on November 3rd: ‘A.P. Moller-Maersk has announced plans to cut its workforce by 10,000 employees due to challenging market conditions in the ocean shipping industry as the pandemic-fueled bubble in container shipping bursts. The container shipping giant is facing lower freight rates and volume, which have prompted the need for cost-cutting measures.’
The report added, ‘In its financial results for the third quarter of 2023, Maersk reported revenue of $12.1 billion, a significant decrease from $22.8 billion in the same period last year.’ Container Magazine also noted that Maersk ‘looks to contain costs after its profit before tax plunged by 92% to $691M in the third quarter of the year as market overcapacity caused significant price drops.’
Furthermore, qCaptain added: ‘The company’s earnings before interest and taxes (EBIT) margin was 4.4%, impacted by the decline in freight rates and volumes. Consolidated EBITDA came in at $1.8 billion for the quarter, down more than 80% from the $10.8 billion in Q3 2022.’
Moreover, in a press release Maersk also highlighted some of the important financial data from their latest quarterly report:
Ocean reported a 9% increase in volumes since the previous quarter and a strong cost focus supported an 11% decrease in unit cost at fixed bunker compared to Q3 2022. However, EBIT was negative at USD 27m, down from USD 8.7bn in Q3 2022, driven by significant pressure on rates, in particular on Asia to Europe, North America and Latin America trades.
Revenue in Logistics & Services was USD 3.5bn compared to USD 4.2bn in Q3 2022. The segment was impacted negatively by lower prices, especially in the air and haulage market, while volumes were broadly back in line with last year’s level. Increased cost management helped stabilise margins sequentially.
Terminals reported revenue at USD 1.0bn compared with USD 1.1.bn in Q3 2022 driven by less demand for storage amid eased global congestion and a 4.1% decline in volume. Results were strong as a combination of price adjustments and cost measures. Return on invested capital (ROIC) increased to 10.3%, exceeding the expectation of above 9% towards 2025.
The company forecasts: “Maersk now sees global container volume growth in the range of -2% to -0.5% compared to -4% to -1% previously. Ocean expects to grow in line with the market.”
Commenting on the results, CEO Vincent Clerc said in a statement:
Our industry is facing a new normal with subdued demand, prices back in line with historical levels and inflationary pressure on our cost base. Since the summer, we have seen overcapacity across most regions triggering price drops and no noticeable uptick in ship recycling or idling. Given the challenging times ahead, we accelerated several cost and cash containment measures to safeguard our financial performance.
While continuously streamlining our organisation and operations, we remain dedicated to our strategy of fulfilling our customers’ diversified supply chain needs while pursuing growth opportunities across our Terminals business and Logistic & Services.
More data expressed in Maersk’s press release can be read here.
With sour numbers like these, the mainstream publications such as the BBC conceded that this is indeed a bellwether for the economy. Russ Mould, investment director at AJ Bell, cited by the BBC, said Maersk’s latest results suggested “the global economy is losing speed.”
If you want an economic bellwether, look no further than Maersk, as its status as one of the world’s largest container shipping companies makes it a fair proxy for global growth.
Transportation demand will be strong if the economy is going well, but the opposite will apply if there are clouds on the horizon.
He went on to say that the current debacle with container shipping was accelerated due to overcapacity in the industry, which he explained was “great if you are the person paying to move goods from A to B as it should enable you to barter for a lower price, [but] terrible if you’re the one owning and operating the ships.”
AUTHOR COMMENTARY
Mould said it best, as this is clearly a canary in the coalmine as to what’s going on economically around the world. Contrary to what the mainstream media keeps trying to shove down our throats, these numbers do not lie. People cannot afford all this stuff anymore. The Covid Wars ignited a major shipping boom because everyone was locked-up in their homes, ordering stuff at record numbers with their stimmie and unemployment checks. Now that the consumer is broke, inflation is off the charts around the world, and interest rates are up, you are seeing what is happening with global trade. Everything is breaking apart at the seams.
However, there is another hidden factor to this. A massive rescinding on trade and exports as part of the globalist agenda by 2030 to cut shipping to supposedly reduce emissions. In 2021 I reported on the Absolute Zero Agenda that maps out the goalposts to reach by 2030 and 2050, and one of those was a systematic decline in shipping.
There are currently no freight ships operating without emissions, so shipping must contract [by 2030]. [By 2050] All shipping declines to zero.
The authors wrote
This collapse in shipping was baked into the cake years ago and it is no starting to really come to the forefront, though this insidious and propagandistic agenda will receive no press coverage until it is far too late.
But the CEO of Maersk is subtly acknowledging what I am saying. Notice his word choice: “Our industry is facing a new normal with subdued demand.” Ahh, where have we heard that before?
A poor man that oppresseth the poor is like a sweeping rain which leaveth no food.
Proverbs 28:3
[7] Who goeth a warfare any time at his own charges? who planteth a vineyard, and eateth not of the fruit thereof? or who feedeth a flock, and eateth not of the milk of the flock? [8] Say I these things as a man? or saith not the law the same also? [9] For it is written in the law of Moses, Thou shalt not muzzle the mouth of the ox that treadeth out the corn. Doth God take care for oxen? [10] Or saith he it altogether for our sakes? For our sakes, no doubt, this is written: that he that ploweth should plow in hope; and that he that thresheth in hope should be partaker of his hope. (1 Corinthians 9:7-10).
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The economy is going down the tubes at break-neck speed and shows no sign of stopping or slowing down.
The U.S. economy as well as the housing markets and real estate are plunging as well even!
It’s God’s massive judgement on a nation that has rejected and shunned Him and the King James Bible for so many years, and now the chickens have come home to roost!
Same. “New normal” jumped right out of the screen at me.
It is judgement on the world, not just a nation. I think we as saved Christians are at a time in history where we are witnessing what the King James Bible has said will happen and are seeing it first hand.
Although times are tough and will get tougher; have ya pondered that we maybe the saved people that my not see death, by head straight home to the Lord
1Th 4:15 For this we say unto you by the word of the Lord, that we which are alive and remain unto the coming of the Lord shall not prevent them which are asleep.
1Th 4:16 For the Lord himself shall descend from heaven with a shout, with the voice of the archangel, and with the trump of God: and the dead in Christ shall rise first:
1Th 4:17 Then we which are alive and remain shall be caught up together with them in the clouds, to meet the Lord in the air: and so shall we ever be with the Lord.
1Th 4:18 Wherefore comfort one another with these words.
Excellent, excellent points, David. I look forward to being part of the Bride of Christ, please Lord make a place for me in that!
First, our truly saved brethren that are dead go up, then us that are truly saved and still living next.