jwesth @jwesth: "𝙏𝙝𝙚 𝙧𝙚𝙙 𝙨𝙚𝙖 𝙘𝙤𝙣𝙛𝙡𝙞𝙘𝙩 𝙞𝙨..."

United Kingdom

𝙏𝙝𝙚 𝙧𝙚𝙙 𝙨𝙚𝙖 𝙘𝙤𝙣𝙛𝙡𝙞𝙘𝙩 𝙞𝙨 𝙘𝙤𝙣𝙩𝙞𝙣𝙪𝙚𝙨 𝙩𝙤 𝙨𝙪𝙥𝙥𝙤𝙧𝙩 𝙈𝙖𝙚𝙧𝙨𝙠 🚢 The Danish shipping giant, $MAERSKB.CO (A P Moller Maersk) has seen a significant increase in its stock price this morning, up c. 8%. This positive development comes on the heels of a notable increase in container freight rates. On Thursday, the maritime research house Drewry reported a 20% increase in freight rates over the last week on the Shanghai – Rotterdam route (see graph below). With the Danish stock exchange closed on Thursday and Friday due to bank holidays, today is the first day investors have the opportunity to react to these improving freight rates. 🌍 The conflict in the Red Sea is lifting the freight rates. The approximately ten days longer sailing time south of Africa than through the Red Sea has led to a reduction in container capacity. This has reduced competition in the otherwise highly competitive market, where Maersk is largely a price taker. 📉 📈 While the Red Sea conflict has temporarily boosted freight rates, the future remains uncertain. This temporary situation could be overtaken by the general overcapacity that already exists in the container market. A significant amount of new container ships are expected to enter the market in the third and fourth quarter. Maritime research firm Drewry anticipates a significant industry overcapacity of up to 25% during 2024, which could revert freight rates from their current elevated levels. $DSV.CO (DSV A/S) $ZIM (ZIM Shipping Services Ltd) $HLAG.DE (Hapag-Lloyd) $KNIN.ZU (Kuehne & Nagel International AG) $DHL.DE (Deutsche Post AG) $UPS (United Parcel Service Inc)