Maersk's resilient outlook downplays fragility

Maersk’s Q1-25 aimed to paint a picture of resilience under pressure, but fragility in the Ocean market and its logistics strategy remain.

In Ocean, the company downplayed the impacts US–China trade tensions, citing minimal exposure and stable global demand—but its outlook relies on assumptions that may prove fragile.

In Logistics & Services, margin gains mask deeper structural issues, as persistent losses in Fulfilled by Maersk and retrenchment in Air highlight the ongoing challenges of executing its tangled and confused integrator strategy.

Maersk’s Q1-25 Ocean Market Outlook

In its Q1 2025 update, Maersk downplayed the impact of US-China trade tensions on its Ocean business. China-to-US volumes make up only 5% of Maersk’s total container volumes, meaning the sharp ~35% booking/volume drop on the lane in April will have only a limited effect on Maersk’s overall performance. The company emphasized that demand across other trade lanes remains stable and sees no cause for concern at the broader market level.

Shippers react, but time is short

Maersk CEO Vincent Clerc noted that shippers are actively extending inventory runways in response to uncertainty around the current 90-day tariff pause, which is set to expire in July. Strategies include:

• Repositioning inventory already inside North America

• Replenishing US shelves via Canadian inventory locations

• Substituting suppliers and sourcing locations where viable

However, the effectiveness of these strategies varies by sector. Clerc highlighted that while substitution is relatively easy in retail, it remains highly limited in critical areas such as semiconductors and rare earths. As a result, current resilience appears to be temporary and may fade beyond mid-year.

Scenario planning: Resilience depends on fragile assumptions

Maersk’s container demand view leads to three potential global trade scenarios:

1. Trade tensions ease: Global volumes rebound in H2, driven by a "catch-up" effect. In this scenario, container demand returns to the 4% year-over-year growth Maersk initially projected for 2025.

   • However, with China-US volumes down 35% in April, and potentially remaining at similar levels through May and June, the scale of the recovery required in the second half would need to be exceptionally strong.

2. Status quo persists: Some of the lost China-US volumes are offset through substitution and rerouting, but constraints on inventory levels and sourcing options keep volumes below underlying demand.

   • This scenario assumes intra-Asia and China-linked supply chains remain stable, despite the sharp drop in China-US trade – a risky assumption, given how deeply these networks are tied to US-bound production.

3. Trade war escalates: Broad-based tariffs lead to a sharp drop in US-bound demand, followed by a broader global slowdown. In this case, Maersk forecasts full-year container demand at -1% in 2025.

   • This outlook relies heavily on rest-of-world (RoW) demand staying stable – a potentially fragile assumption if China’s manufacturing slows or regional trade lanes, such as intra-Asia, begin to feel knock-on effects.

   • To illustrate the math:

     • Maersk mid-range estimate puts Q1-25 growth at 4.5% YoY, with Q2 expected to remain “positive” and so assumed here at 1% here.

     • To end the year at -1% overall, H2 volumes would need to average -8% YoY, a contraction similar to the 2022/23 post-COVID reset.

Risks and blind spots in the outlook: where to look for signals amongst the noise

Maersk maintains a steady, resilience-focused outlook, but it rests on several assumptions. The company’s view depends on non-China-US demand holding firm, inventory tactics remaining effective, and bullwhip-driven volatility staying limited.

In its Q1 report, Maersk notes that “growth is expected to remain positive in Q2, particularly if shippers take advantage of the current 90-day tariff pause by frontloading shipments and rebuilding inventories”. However, this optimism assumes that short-term tactical moves can offset deeper structural pressures – a view that may prove optimistic if trade tensions persist or intensify.

This leaves two critical questions:

• Can we realistically expect meaningful frontloading and inventory restocking when China-US bookings/volumes fell ~35% during April?

• Can RoW demand remain insulated from the sharp drop in China-bound manufacturing activity, without spillover into upstream trade lanes like intra-Asia?

Q2 demand will be pivotal. Maersk’s outlook hinges on these two assumptions holding, but both remain highly uncertain.

Maersk Logistics & Services – Strategy in Reset, Performance Under Pressure

Integrator strategy no longer aiming to integrate

The latest iteration of Maersk’s integrator vision focuses on going “narrow and deep in selected geographies” – a notable retreat from its earlier ambition to be an end-to-end logistics giant.

While arguably a more realistic ambition, the shift comes with limited transparency, making it hard to assess what performance – and ultimately success – now looks like.

Segment Performance: Mixed Signals Behind Modest Growth

While headline figures show margin improvement and stable revenue, Fulfilled by Maersk (FbM) continues to be a drag on overall performance, reporting an EBITA of -2.5% in Q1 and pulling the segment below its 6% margin target. The weakness is concentrated in warehousing and middle mile operations, which have faced persistent operational and profitability challenges.

Structural and Execution Questions Persist

FbM’s underperformance raises strategic questions:

• Did Maersk misjudge the acquisition of assets like Performance Team, LF Logistics, and Pilot, or does the issue lie in a lack of execution and integration discipline? 

• The ongoing “rebasing” of middle mile – meaning the performance of acquired the Pilot business – points to pressures in US trucking, but why is Maersk under so much more strain than peer companies operating under the same conditions?

Air Freight: Margin over volume, but at what cost?

Maersk tells the story that it chose to scale back air freight volumes (-19% YoY in Q1-25) to protect margins. This follows the standard forwarder playbook during a downcycle. but how much of this was choice and how much did market pressures force Maersk’s hand? Lower volumes almost certainly mean a retreat from the China-US e-commerce business, which is under pressure from US changes to de minimis rules.

The outcome is Maersk’s air business looking increasingly like a trade lane specialist, handling volumes estimated at just ~15% of the scale of a combined DSV/Schenker operation.

Strategic Clarity Still Lacking

In summary, Maersk’s Logistics & Services segment remains operationally tangled and strategically confused.  

While there are signs of progress in margin management and targeted growth, Q1-25 results also highlighted:

• Persistent losses in Fulfilled by Maersk,

• Retreat in Air, and 

• The lack of clear visibility into operational performance

 …all of which raise questions about execution and strategic clarity. 

With FbM unprofitable and the integrator model still unclear, Maersk has yet to define what this strategy truly means in 2025. The new focus on being “narrow and deep” in select geographies may reflect necessary discipline, but for now, it signals retrenchment rather than reinvention.