The Shipping Industry Sends a Trade Warning

The Shipping Industry Sends a Trade Warning
Jon Sindreu Nov. 14, 2018

Maersk, world’s largest containership operator, becomes latest company to cut its forecasts for trade growth

Key global trade indicators are starting to flash red. This time, it may be for the right reasons.

A.P. Moller AMKBY 0.99% –Maersk Group, the world’s largest containership operator, on Wednesday reported slower than expected unit growth in its core shipping division during the third quarter. Higher fuel prices are also squeezing the company’s margins, though its acquisition of the Hamburg Süd container fleet helped boost

The Danish conglomerate moves 18% of the world’s containers and is often seen as a bellwether for world trade, which is currently under threat by the prospect of a global economic slowdown and the Trump administration’s protectionist policies. Shipping and logistics companies like Maersk, Hapag-Lloyd and Deutsche Post —owner of DHL Express—have all been forced to issue profit warnings this year, and third-quarter results have confirmed a darker outlook.

It’s still early, but this should nonetheless concern money managers. While the U.S. economy remains strong, weakening trade could signal further trouble in China, which would particularly endanger Europe and emerging markets.

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