BREAKINGVIEWS-Trump hands shippers Red Sea dilemma

By Yawen Chen

LONDON, May 8 (Reuters Breakingviews) - Shipping companies may soon face a unity problem, much like the oil cartel OPEC. Danish container shipping giant Maersk MAERSKb.CO on Thursday stood by its EBITDA forecast for 2025, despite a U.S.-Houthi deal that could reopen the less profitable trading route through the Suez Canal. But declining trade volumes may weaken the case for collective action that would preserve what has been a lucrative status quo.

As a global trade barometer, $27 billion Maersk is surprisingly optimistic about its fortunes. On Thursday it left a 2025 EBITDA guidance of $6 billion to $9 billion unchanged, even after downgrading a 4% projection of trade growth to a range between that and a 1% contraction. The main positive factor seems to be continued Red Sea disruptions: Maersk now assumes that ship diversions from the Suez Canal would last through the end of 2025.

Yet Maersk’s new projection jars with U.S. President Donald Trump’s new ceasefire deal which he struck with the Houthis earlier this week. In theory, a U.S-led diplomatic solution should soon allow many ships to start passing through the Red Sea without fear of attack. However, Maersk CEO Vincent Clerc says it is still unclear what the terms of the deal are – and the Houthis have said that a ceasefire does not include Israel. This ambiguity coupled with the war in Gaza provides cover for shipping giants to collectively keep swerving the Red Sea.

But that requires a kind of pack mentality. One key assumption is that the industry acts broadly in sync - in other words, if the likes of Mediterranean Shipping Company (MSC), CMA CGM and COSCO Shipping are transiting safely through the Suez again, it would be hard for Maersk to ignore that evidence and continue to charge more for taking longer trips around Africa. But if all of the big players avoid the Red Sea they can protect their profits with higher fees.

Still, the current headwinds from trade wars are already pressuring carriers to fight for diminishing cargos. Ever since February, a major reshuffle of shipping alliances intensified competition and sent shipping rates down. Just like OPEC’s unity is showing cracks under the pressure of lower oil prices, shipping companies may be more inclined to undercut each other. If such a price war kicks off, Maersk’s rosy shipping forecast may be difficult to maintain.

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CONTEXT NEWS

Danish shipping giant Maersk said on May 8 that its earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 70% year-on-year to $2.71 billion in the first three months of 2025, compared with the $2.41 billion expected by analysts in a company-compiled poll.

Maersk said it now expects global container volumes within a range of down 1% to up 4% in 2025, compared with the 4% growth estimated in February. However, it kept its 2025 EBITDA guidance at between $6 billion and $9 billion.

Maersk also said it expects Red Sea disruption to continue throughout 2025.

U.S. President Donald Trump said on May 6 that the U.S. would stop bombing the Iran-aligned Houthis in Yemen, saying that the group had agreed to stop attacking U.S. ships. Under the ceasefire agreement, neither the U.S. nor the Houthis would target the other, including U.S. vessels in the Red Sea and Bab al-Mandab Strait.

Maersk’s shares fell 1.97% to 11,170 Danish crowns by 0824 GMT on May 8.