Shipping profit boom evaporates on US tariffs and Red Sea reopening 

Maersk has forecast underlying earnings before interest, tax, depreciation and amortisation of $6bn to $9bn in 2025, down from $12.1bn last year. Picture: Sam Boal/Rollingnews.ie

Global shippers from AP Moller-Maersk to Cosco Shipping, which logged windfall earnings last year, may see a reversal of fortunes in 2025 as a potential reopening of the Red Sea route and punitive US tariffs loom.

Plans by US president Donald Trump to introduce new import levies are damaging trade, while the prospect of a lasting ceasefire in the Middle East could redirect traffic back through the Suez Canal, driving rates lower.

Global liner rates fell 5.9% sequentially in the week ended February 27, after earlier breaking below $3,000 per 40-ft container for the first time since early May, according to World Container Index data. 

The Shanghai Containerized Freight Index has lost 57% from its peak in July.

Increased US tariffs on Chinese goods will likely reduce volumes in container shipping by 1.5% to 2% in 2025, according to Kepler Cheuvreux analyst Axel Styrman, who estimates growth of 3.5% to 4% when excluding the levies. 

The reopening of Red Sea routes — expected at some point in the course of the year — could reduce container shipping demand by around 6%, his calculations show.

“If both these events materialise, capacity utilisation — which also will be negatively impacted by continued high fleet growth — will come under severe downward pressure in 2025, with a potential decline in spot rates by 30% to 40% compared with 2024,” Mr Styrman said.

Maersk has forecast underlying earnings before interest, tax, depreciation and amortisation of $6bn to $9bn in 2025, down from $12.1bn last year. 

A reopening of the Red Sea lane by mid-year would point to the low end of the guidance range, but it could reach the high end if vessels cannot transit there until year-end, it said on February 6.

Asian shipping firms, set to report next month, also face profit declines in 2025. 

Shanghai-based Cosco, the world’s largest shipping company by market value, more than doubled net income last year, it said in a preliminary report in January. 

Consensus shows profit sliding almost 50% this year.

Bloomberg