Maersk said factories in China are currently operating at 50-60% of capacity because the economy has ground to a halt.
Maersk reported an unexpected loss in the fourth quarter of $72 million from a profit of $46 million a year earlier. The shipper is a barometer of global trade, said revenues declined 5.6% to $9.67 billion, missing expectations of $9.4 billion, due mostly to a decline in container shipping.
Shipping volumes in both East to West and North to South routes were lower amid several years of front-loading by corporations ahead of President Trump’s tariffs. Lower demand was seen across Europe, Latin America, the US, and across Asia Pacific countries last quarter.
The shipper said 2020 guidance is filled with many uncertainties because the deadly virus can still spread outside of China and impact the global economy.
“As factories in China are closed for longer than usual in connection with the Chinese New Year as a result of the COVID-19, we expect a weak start of the year,” Maersk warned.
Maersk’s warning comes as China’s economy remains completely paralyzed, expected to slow global trade in goods in the coming months and produce increased trade uncertainties, the World Trade Organization (WTO) said this week.
“The slow start could be dampened further,” the WTO said in the report, “by global health threats and other recent developments in the first few months of the year, which are not yet accounted for in the barometer’s best-available historical data.”
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