Red Sea unrest raises Maersk profits

Maersk’s second-quarter earnings soared to $833 million due to higher freight rates linked to Red Sea instability. Although this is a 44% drop compared to the same period in 2023, it marks a fourfold increase from the first quarter of this year. Red Sea tension has led many shippers to reroute around Africa, elevating freight costs and boosting revenue, despite higher operational expenses. Maersk’s upgraded outlook anticipates a $3 to $5 billion operating profit in 2024, accounting for ongoing disruptions. The company’s profitability has improved amidst global supply chain pressures. The Houthi movement’s attacks on shipping in the Red Sea, in support of Palestinians, have contributed to the increased freight rates and rerouting decisions by the world’s shipping companies.