KEY TAKEAWAYS: Maersk warns freight rates could sharply cut earnings. New ships and Red Sea route reopening boost capacity. Global shipping demand remains strong despite pressure. Company plans cost cuts including job reductions.   Danish shipping giant Maersk said on Thursday falling f reight rates, driven by container-vessel overcapacity and the gradual resumption of shorter Red Sea routes, could halve earnings in 2026, dragging its shares down sharply. Maersk, which reported a fourth-quarter operating profit roughly in line with forecasts, expects strong demand for shipping goods at sea, boosted by consumer spending, but an influx of new vessels and an expected full resumption of Red Sea routes that cut journey times will weigh on freight rates. “New ships are coming in, and at the same time, shipping through the Red Sea is likely to reopen, which will free up ship capacity. All of this will put pressure on freight rates this year,” CEO Vincent Clerc said at a press conference. MAERSK SHARES TAKE A HIT AFTER RECENT RISE Fourth-quarter underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) came in at $1.84 billion, just shy of analysts’ forecasts of $1.88 billion. Maersk, which is often seen as a bellwether for global trade, projected global container-volume growth of 2% to 4% for 2026, a slowdown from 5% in 2025, citing recession risks in the global economy. It also expects underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $4.5 billion to $7 billion this year, a steep decline from $9.53 billion logged in 2025, with analysts anticipating $6.49 billion. Its shares, which have risen around 80% since April last year, were trading 5.5% lower by 1014 GMT. SCRAPPING SHIPS AND INCREASING CAPACITY Shipping companies, including Maersk and Hapag-Lloyd, are weighing returns to the critical Asia-Europe Suez trade corridor after vessels were rerouted around Africa in late 2023 following attacks in the Red Sea. Maersk also announced plans to extend the operational lifespan of its container vessels from 20 to 25 years, reducing scrapping activity and adding further capacity. New vessels are expected to increase capacity by 5% this year. “Many had hoped that more ships would be scrapped to offset the arrival of many new ships,” said Jyske Bank analyst Haider Anjum. “But when you extend their lifespan, it points in the other direction, and it means that freight rates will come under further pressure as capacity increases so much.” The resumption of Red Sea shipping routes is set to free 6%-7% of global container shipping capacity this year, Clerc said. While these shorter routes reduce transit times on critical corridors such as Asia-Europe, they also exacerbate overcapacity in the market. “Demand in the global economy is super strong,” Clerc said, while pointing out that “the supply side shapes the current situation that we face in the shipping sector”. As part of broader cost-cutting measures to navigate increased uncertainty and pressure on profitability, Maersk will reduce its share buyback programme and cut 1,000 administrative jobs. (Reporting by Jacob Gronholt-Pedersen; Editing by Terje Solsvik, Thomas Derpinghaus and Emelia Sithole-Matarise) ...read more read less