Maersk’s North American Market Update – July 2024
Ocean and Key Ports Update
Highlights from our Q2 2024 Interim Report
At A.P. Moller – Maersk, we increased momentum in Q2 2024 on the back of strong market demand with increased volumes, higher rates, and continued cost control. We continued our efforts in optimizing our network and achieved a utilization of 97% (91%), 6 percentage points higher than in Q2 2023. Reliability was impacted by network disruptions, and while it was lower than in Q2 2023, improved compared to Q1 2024 as the result of targeted efforts.
We remain focused on the ambition to deliver a best-in class network with industry-leading reliability, protected from disruptions. A key component to this ambition is our ‘Gemini Cooperation’ between Maersk and Hapag-Lloyd AG announced in Q1 2024, starting in February 2025.
Since the announcement, we accelerated our efforts of testing and fine tuning the network of the future. A key development is the strategic selection of key port terminals to serve as hubs connecting the network’s 58 services and more than 6,000 port-to-port combinations. In continuation of our fleet renewal plan we are in the process of signing newbuilding orders and time-charter contracts of 800k TEU, that will ensure the long-term competitiveness of our fleet and the ability to deliver on our decarbonization goals.
Alongside network improvements, our ocean product maintains its efforts to reduce costs. Several cost containment initiatives have been implemented across the organization, whilst preserving the focus on customer outcomes and reducing emissions.
ILA and USMX Labor Negotiations
The current contract between the USMX and the ILA is set to expire on September 30, which has created concerns for many industry stakeholders and cargo shippers about the possibility of disruptions along the Gulf and East Coast ports. Additionally, the ILA has filed required notifications with government agencies and the negotiating parties regarding the potential for a strike if no agreement is reached. However, as there is a 'no strike' clause in effect until the expiration of the contract, no job actions are anticipated before October 1, and the filing of notifications does not indicate a strike will occur.
As with all industry negotiations over the years, we are confident that the parties involved are committed to reach an agreement that works for everyone and provides for robust and efficient supply chains. However, despite a long history of successful negotiations, the possibility of a strike does exist without a settled contract in hand. Disruptions may be localized or more broad-based. Should a general work stoppage occur on the U.S. Gulf and East Coasts, even a one-week shutdown could take 4-6 weeks to recover from, with significant backlogs and delays compounding with each passing day.
Should disruptions occur, Maersk stands ready to assist our customers explore options to keep their supply chains moving best as possible via alternate routes, modalities, or distribution schedules. Customers are asked to stay in close contact with their Maersk representatives now as communicating supply chain requirements will be key to developing tailored contingencies if needed.
Air Freight Update
As reported in our Q2 2024 Interim Report, global air freight forwarding demand grew by 3.0% y/y in Q1 and is estimated to have increased by 6-7% y/y in Q2. A modal shift from container shipping supported air freight demand growth, in reaction to the ongoing situations in the ocean market.
Air cargo market will remain strong in the second half the year, driven by robust e-commerce demand in both established and emerging markets as well as the Mexico automotive and consumer goods industry as reported by the International Air Transport Association (IATA.)
At Maersk, we remain committed to our air freight solutions, recently acquiring its first of two Boeing 777F that will enable our global air cargo market. Maersk’s air freight customers will benefit from increased capacity and efficiency by the introduction of the two Boeing 777F. Both will be deployed on Maersk’s existing Europe-China route with initially three weekly flights, and later up to six weekly flights.
For any information on our air freight solutions please contact your sales rep or contact our team via this form.
Product Spotlight
Cold Storage
With a presence in over 130 countries, Maersk offers unparalleled global reach, ensuring your perishable goods are stored and transported seamlessly across borders. This end-to-end service ensures a smooth and efficient supply chain, and it is powered by advanced tracking and reporting tools to provide you with full visibility of your inventory, enhancing your control and decision-making processes.
In the United States, Performance Team – A Maersk company operates four cold storage warehouses that are strategically located in the Northeast and Southeast, which enable “PT” to serve key perishable markets. Furthermore, Maersk has thirteen locations globally to service customers that need cold storage solutions outside of the United States. In addition to providing storage services for international cargo, these facilities are well equipped to handle your domestic supply chain needs.
Services in these facilities include USDA inspection, multi-temperature and multi-room cold storage, case picking, and blast freezing.
Did you know that the average age of a cold storage warehouse in the United States is 38 years? The PT facilities in Charleston, Wilmington, and Houston are new constructions that include the highest standards of sustainability. Examples of our sustainability features include using freon refrigerant, incorporating water and heat recycling processes, and achieving LEED Silver certification in Houston and LEED Gold certifications in Charleston and Wilmington. Our facilities are operated by professionals with decades of expertise in logistics and supply chain management so that your products are in the hands of professionals who understand the complexities of cold storage.
Beyond cold storage, Maersk offers integrated logistics solutions, including transportation, customs clearance, and last-mile delivery. Please visit our Cold Storage site to learn more about how PT and Maersk can provide stability to your perishable supply chain!
More News from Maersk from around the world
- Maersk reports Q2 with increased earnings momentum
- Maersk continues with fleet renewal plan
- Maersk’s New Phoenix Distribution Center Serves American Honda’s Powersports and Products Division
- Maersk awarded “3PL Company of the Year” for the second consecutive year
- Maersk CEO Vincent Clerc speaks to ‘massive impact’ of the Red Sea situation on global supply chains
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