Maersk Line, the shipping giant, said on Wednesday Eastern Time. $AMKBY.US$ In addition, the CEO stated that China remains a strong engine of global freight, and the company has not seen any signs of the US economy shrinking.

In the second quarter of this year, the share of containers originating in or bound for China has increased globally.

The demand for freight in the United States is still strong.

As a global shipping giant, Maersk transports about one-fifth of the world's marine transportation goods, and is often seen as a barometer of global trade. The company's observations and forecasts of the demand for freight in various countries can greatly reflect the economic situation and prospects of that country.

Maersk CEO Vincent Clerc said: "In fact, we have seen remarkable resilience in the (container) market over the past few years, in the face of all the concerns about economic recession."

He added that container demand is usually a good indicator of a country's macroeconomic trend.

Last week, global concerns about a US economic downturn suddenly escalated as unexpected non-farm payrolls were announced. In addition, the latest data released by the US showed that retail trade inventory (a measure of idle inventory) in May increased by 5.33% year-on-year, further exacerbating market concerns.

Container xChange, a US container leasing platform, released a report on Wednesday stating that US cargo inventory is higher than demand, which means that the "boom period" of container traders, logistics markets, and inventory retailers will be reduced in the coming months.

But Clerc said that although idle inventory in the US is indeed "higher than at the beginning of the year, it has not reached a worrying level or a level that seems to indicate a major slowdown."

"We have also looked at a lot of purchase orders from retailers and consumer brands that need to be imported to the US to meet demand for the next month. These orders still seem quite strong...at least for now, the data and indicators seem to suggest that people still have some confidence in the current level of consumption in the US."

China is still the strong engine of global freight.

Maersk CEO Clerc said that the resilience of the global container shipping industry over the past few years has come as a surprise to the company and expects this momentum to continue in the coming quarters, and there is no sign of a global economic recession.

Maersk CEO also specifically mentioned that Chinese exports have always been the engine behind strong container volume: in the second quarter of this year, the share of containers originating in or bound for China has increased globally.

In recent weeks, several shipping experts have said that the threat by former US President Trump to impose high tariffs on Chinese goods could lead to importers in the US and other regions placing orders in advance, which Clerc confirmed.

"Obviously, not only customers in the United States, but almost all customers almost always place orders ahead of time, because of the possibility of trade conflicts, people would rather store Christmas goods in warehouses ahead of time."

The Red Sea Crisis will continue to increase shipping costs.

In 2022, Maersk warned that global inflation, economic recession threats, the European energy crisis, and the Russia-Ukraine conflict will weigh on global freight demand. These factors combined to depress global shipping fees in 2023 and caused a sharp drop in Maersk's profits.

Since the end of last year, due to the intensification of the geopolitical tension in the Red Sea, the global shipping situation has reversed to some extent. The Red Sea conflict has caused global shipping companies to shift trade routes to the southern coast of Africa, thus lengthening shipping times, reducing global system capacity, and driving up shipping costs.

Clark expects the diversion issue caused by the Red Sea conflict to continue at least until the end of this year.

He said:"Of course, this requires more capacity, more ships, to transport global trade around the world, which has led to some capacity shortages we are currently dealing with in the second and third quarters."

"This means that in the short term, (shipping) costs will be higher, so we have to bear huge costs, we need more ships and more containers to do the work we expect."

He went on to say that if this situation continues, Maersk's cost base will experience "serious inflation", and it will need to pass the inflation on to customers - this means that shipping costs from Asia to Europe or the US East Coast will rise by 20% to 30%.

Editor/ping