"It's Worse Than 2008": CEO Of World's Largest Shipping Company Delivers Dire Assessment Of Global Economy

Tyler Durden's picture

Earlier today, we highlighted the rather abysmal results reported by Maersk, the world’s largest shipping company.

To the extent the conglomerate is a bellwether for global growth and trade, things are looking pretty grim. Maersk Line - the company's golden goose and the world's largest container operator - racked up $182 million in red ink last quarter and the outlook for 2016 isn't pretty either. The company now sees demand for seaborne container transportation rising a meager 1-3% for the year.

The demand for transportation of goods was significantly lower than expected, especially in the emerging markets as well as the Group’s key Europe trades, where the impact was further accelerated by de-stocking of the high inventory levels,” the company said, in its annual report.

Just how bad have things gotten amid the global deflationary supply glut you ask?

Worse than 2008 according to CEO Nils Andersen who last November warned that “the world’s economy is growing at a slower pace than the International Monetary Fund and other large forecasters are predicting.” Here’s what Andersen told FT:

It is worse than in 2008. The oil price is as low as its lowest point in 2008-09 and has stayed there for a long time and doesn’t look like going up soon. Freight rates are lower. The external conditions are much worse but we are better prepared.”

As FT goes on to note, “capacity in the container shipping industry increased 8 per cent in 2015” despite the fact that Maersk only sees global trade growing at between 1% and 3% in 2016.  

Imports to Brazil, Europe, Russia, and Africa are all falling, Andersen warned. The company's business, Andersen says, is suffering from a "massive deterioration." That, you can bet, will likely lead to a "massive deterioration" in Maersk's shares, which took a substantial hit on Wednesday in the wake of the quarterly and annual results.

Through it all, Andersen is attempting to strike an upbeat tone: "We are very strongly placed not only to get through this period but benefit from it. We are quite enthusiastic about it," he said.

Check back in six months to see how "enthusiastic" Andersen is once he realizes the slump in global growth and trade is no longer cyclical but has in fact become structural and endemic.

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EscapeKey's picture

nah, that can't be. Forbes are telling us that it's all overcapacity.



SERReal1's picture

And Obama said the economy is great! /sarc

Looney's picture

... The external conditions are much worse but we are better prepared

Why do all these CEOs sound like Jeffrey Skilling the day before Enron went Boom, Big Badaboom!  ;-)


Chuckster's picture


It's all about putting lipstick on the pig. 

Winston Churchill's picture

Going to need a bigger trowel.

CheapBastard's picture

It's just "Change he can't believe in!"


BTW, I'm glad to see Bernie is meeting with the Rev Al today to get his blessings [... and get his tax advice probably].

cheka's picture

need more of this 'bad' news.  import tariff or die.  reduce/eliminate income tax on wages with proceeds of tariff


Herd Redirection Committee's picture

IMF: "You FUCKED UP.  You TRUSTED us (and our projections)."

j0nx's picture

Why'sBernie even bothering at this point. Hildabeast could lose 45 out of 50 states and still have enough super delegates to lock this thing up. Corruption at its finest. You can bet Yeb has a good share of them locked up on his end too regardless of how many of the plebs vote for him. The only question is will the American people stand for it when both Trump and Sanders handily win the primaries yet still lose their nominations due to the super delegate foolery.

DownWithYogaPants's picture

A delegate that would vote for Jeb! would not be all that super.

bbq on whitehouse lawn's picture

Then people stop voteing with ballots.

mademesmile's picture

Follow up Q. should have been HOW are you better prepared?

Hitlery_4_Dictator's picture

Wow, this headline alone will be good for some major short covering, prolly will end at around 16k today with all the short covering. 

Pa Kettle's picture

Now there are even algos posting to ZH.

Mr. Cynic's picture

This is just Maersk's evil scheme to get everyone else to sell their fleets and go home.

1000yrdstare's picture

He's peddling fiction...choomy told me so..

slaughterer's picture

At least we have Tesla earnings after the bell to cheer us up with a little Wed afternoon humor.  

Winston Churchill's picture

TESLA earnings you say.

Where ?

Kefeer's picture

In the distant future with that great battery tech call lithium ion - revolutionary I tells ya.

Consuelo's picture



Had one of those fuckers catch fire on me the other day (laptop battery).    They don't fuck around either once they catch, let me tell ya...   Now imagine how many hundred lbs. worth in one of those cars...?   No wonder they go up like a Roman candle...



Kefeer's picture

Bad news will be bullish.

holgerdanske's picture

What should be borne in mind here is that Maersk is also involved in oil, which is not going smoothly at the moment. And then they are heavily involved in the Danish state! which is also not going too swimmingly. The government there is a bunch of high school kids with no experience, and the ones with experience are not honest.

Add to that a coktail or Syrians and North African trash, and you have a perfect scenario for a stormy journey in high winds.

enough to make the best man sea sick many times over.


Maersk, a sell in my book.

EscapeKey's picture

couldn't possibly be worse than the prior centre-left government, which was, in a word, incompetent. while the rest of the world rebounded, thorning spent her time taking selfies with (supposedly) real leaders.




Economic Growth (GDP, annual variation in %) [2010] 1.6 [2011] 1.2 [2012] -0.7 [2013] -0.5 [2014] 1.1


CheapBastard's picture

99% of the market is a 'sell' at this point given the downward spiraling "everything is awesome' economies. The frightening part is to hear some economists and the potus brag how swimmingly peachy it is going.


It's good to see voters ain't stupid given last nights upsets. The middle class sees their entire ;life crumble under the weight of "Yes we can!" politics. DeeBlazio's Big Apple failure is a good example:


Things have gotten bad enough on public transit that even our old pal Curtis Sliwa is slapping on the ol’ red beret. Following a series of slashings on the subway—six since the beginning of the year and four in just the last week—


“[Criminals] just don’t fear us,” one senior officer told the Observer. “They know we’re unlikely to stop and question people acting in suspicious ways. And we’re not. It’s not worth getting called on the carpet and risking our livelihoods. You don’t think the changes to stop-question-and-frisk are having an impact? Ha! Just watch the crime numbers continue to rise. All the down-grading of crime statistics that goes on won’t be able to hide it.”

Last month’s face-spitting rampage in Brooklyn was just another example of a city that can feel like it’s lurching back to an out-of-control place.


j0nx's picture

Ah come on, Andersen is just peddling fiction. The boy king told me on the teevee that all was perfect and I tend to beleieve HIM over some uppity CEO with his actual boots on the ground and all.

dimwitted economist's picture

it soon will be WORSE than 08/09' i agree 100%


Got silver and gold?

slaughterer's picture

Nobody can afford to buy shipped goods from Asia with their skyrocketing zerocare monthly bills.   Its the neo-socialist state, stupid.  

NorthernPike's picture

I can afford to buy shipped goods from Asia as well as pay for zero care. I choose not to do either.

abyssinian's picture

NO NO NO, Yellen said everythign is fine and normalizing. 

Chuckster's picture

Worse?   I think it's better...I'm loving it!  Finally! 

Oby couldn't give a shit less about what's going on.

Poor Janet has to act like she knows what's going on.

Son of Loki's picture
Husky layoffs confirmed as Calgary company continues cost-cutting


"These are difficult decisions and we will continue to take the steps necessary to ensure the company's resilience through this cycle and beyond," said company spokesperson Mel Duvall in an email.




Low oil prices hollow out Calgary's downtown core


The heart of our city is hollowing out.

Gone are thousands of downtown white collar office jobs, as oil and gas companies cut employees and slash entire departments.




Calgary downtown unemployment soars to 18%.

abyssinian's picture

$27 oil and the shipping company can't make money? Get out of here! stop paddling fiction! 

Raffie's picture

Forbes says "

Whatever The Baltic Dry Index Says, Global Trade Is Not Collapsing"



In the comment section the writer of the article is calling out Zero Hedge.

"Tim Worstall 11 hours ago


It’s possible that your error is in believing Zero Hedge you know."



SERReal1's picture

More like is it possible that Tim Worstall is an idiot? Not only is the BDI down to an all time low, the rail time indicators published by the AAR (www.aar.org) is showing rail traffic at levels not seen since 2008-09. And we all know how that went.

Raffie's picture

Exactly, but if the BDI was volume how you explaing rail and trucking demand cooling off?

He is another CNN paid POS.

SERReal1's picture

The BDI, RTI, and even the CASS Freight Index are all measures of goods (volume) moving throughout supply chains. If all of those indeces are trending downward (as they are), that is a leading indicator that the economy overall is slowing down.

Iam_Silverman's picture

" If all of those indices are trending downward (as they are), that is a leading indicator that the economy overall is slowing down."

Or, maybe they are just shifting more manufacturing to local factories and utilizing just-in-time delivery.

Oh, wait.... Never mind.

Raffie's picture

Maybe they will invent Just In Time Employment. LOL

Anopheles's picture

Forbes is right.  

The VOLUME of trade is increasing, the value of trade is down, mainly becasue it's measured in US dollars and with the rise in the US dollar, that drives down trade value.

Who cares about shipping prices, except the carries themselves.   It's clickbait and you fell for it.


Look at oil.  The price is down, but VOLUME is UP.  In 2015, the total amount of oil INCREASED by 2.6% and in 2016, it's expected to INCREASE by 1.6%.      Does that mean the "oil market" is collapsing?   No, it means that PROFITS are collapsing, not the market for oil. 

Exactly the same thing is happening in shipping.  Too much capacity.  The INCREASE in volume isn't as great as expected, so there's a surplus of ships, which drives the cost of shipping way down.



buzzsaw99's picture

boo fucking hoo for Smedegaard

Bunga Bunga's picture

He doesn't blame it on too many ships? How the hell can mainstream media sell this to the sheeples?

TheDanimal's picture

This is like me saying I'm thankful for being homeless. It sounds nice, but any critical thinker will instantly recognize the comment for what it is.

silverer's picture

Less shipping, less use of non-renewable resources, less pollution. It's a good thing!

Chuckster's picture

ZH should have a raffle AKA contest with an entry fee to guess what will bring this system down.  Banks?  Government? Fed? Strange disease that comes out of nowhere?  War?  Military coup? Migrants?

System down has to be defined.  Dow <1000?  Dow <500? central banks insolvent?  War?

Janet Shalom Bernanke's picture

Yellen says that the economy is close to normal.  So who you gonna believe? someone who ships goods or someone who may read about it?


Iam_Silverman's picture

"Yellen says that the economy is close to normal."

Maybe it's true.  Could this the new normal?

kelley805's picture

J.P. Morgan analysts wrote that the three best leading indicators for recession have been credit spreads, the shape of the yield curve and profit margins.

Here are some signs of a coming recession.

1. U.S. distress ratio started 2016 at 29.6%, the highest since July 2009.


2.  Orders for durable goods fell a seasonally adjusted 5.1% in December 2015.


3.  Investors in high-yield bonds are expecting to see their first negative return since 2008.


4. Default risk spikes


5. Iron ore prices tumble


6. Baltic dry shipping index lowest ever



Here is how to prepare.



Here is how to get your mind off this stuff.



Good luck!

falak pema's picture

endemic is more like systemic. Kangaroos are endemic to Aussi region.

EMpty containers are endemic to the whole world and not just to Maersk.

Systemic failure is when real and digital money stop talking to each other.

Its a bit like Assange and the Swedish legal system.

"Will you talk to me and let me free if I can prove I did not boneharden on those two women?"

"We will talk to you and then ship you to the US where Hillary will want to see if you boneharden on her  for peaking at her chit chats !"

"I am not endemic to bonehardening for all birds of a feather."

Apparently Assange doesn't feel like the CEO of Maersk on that issue !

Some guys as more particular about their bedfellows or container dates.