The shipping bubble has burst.
About three years after COVID-19 restrictions led to spending splurges that stuffed containers on ships, trains and trucks, shipping giant A.P. Moller-Maersk is cutting more than 3,500 jobs, dropping its global workforce from a high of 110,000 to less than 100,000.
In its third quarter financial results report, Copenhagen-based Maersk said it expects to see global container volume drop by between 0.5 percent and 2 percent, which is slightly better than previous forecasts of of a fall of up to 4 percent.
For the third quarter, it posted sales of $12.1 billion, down from $22.8 billion in the same period in 2022.
"Our industry is facing a new normal with subdued demand, prices back in line with historical levels and inflationary pressure on our cost base," CEO Vincent Clerc said. "Since the summer, we have seen overcapacity across most regions. … Given the challenging times ahead, we accelerated several cost and cash containment measures to safeguard our financial performance."
Supply chain consulting group Drewry said on Nov. 2 that the costs to ship a container is 54 percent lower now than it was in 2022 as a whole, with costs between specific markets ranging from 8 percent lower — for Shanghai to Los Angeles — to 80 percent lower for a container moving from Rotterdam, Netherlands, to New York.