Globalization is not falling apart, but the era of increasing barriers to trade is coming to an end, according to one of the top shipping executives.
Soren Schoe, chief executive of AP Møller-Maersk, the world’s second-largest container group, told the Financial Times he saw little evidence that American or European manufacturers were returning home. Instead, they looked for additional suppliers in Asia.
“Global trade is where it is. It will grow more or less with GDP,” he said. “It is no longer liberalizing, so we will not see [even] more growth. It also doesn’t go sharply in the opposite direction. “
The comments from the head of Maersk, whose company is a leader in world trade, as it transports more than one in six containers across the oceans, contrast sharply with gloom of many businessmen who believe that globalization is under attack, especially by populist politicians. Data provider Sentieo found last month that mentions of near-sharing, onshoring and reshoring in company performance meetings and investor briefings are at their highest level since at least 2005.
Scho acknowledged the impact of populist political movements and the lack of new trade deals in the United States, but stressed that he did not see a dramatic change in supply chains.
“We do not see our customers moving production back to Europe. “They’re spreading it in Asia,” Scow said. “It’s very difficult to see in the short term, or maybe even in the medium term, that you’re going to see a dramatic change in the way the world produces consumer goods.”
Maersk expects container traffic volumes to be lower in the first half of this year as global economic growth slows. But thanks to record freight rates, congestion in ports and supply chain problems, the Danish group predicts record profits in 2022.
Scoe said container shipping could soon be affected by a sharp reversal of the factors that led to its boom after the end of the first wave of the coronavirus pandemic. He added that there could be a “bullish effect” when demand shrinks and supply increases, after almost two years of the opposite phenomenon, during which shipping groups have been unable to respond to the jump in consumer spending. “When it happens, it can go pretty fast,” he added.
He said it was unlikely to happen in the second half of the year – as Maersk had previously suggested – but could happen in August or later in the year. “I don’t want to say I’m afraid of that,” he said, noting the increase in long-term container contracts and the fast-growing onshore logistics business.
Scoe also made his first public comment on the MeToo scandal that sparked Maersk and raised the curtain on the abuse of female sailors in a male-dominated sector after a former cadet claimed she was raped on one of the company’s ships.
Maersk’s chief executive said that “to imagine that this could happen to one of our ships is absolutely horrible.” He said the company had known about the alleged rape for almost a year and had since introduced new policies to ensure that there was always more than one woman on board and that the boat’s captain and chief engineer had received appropriate training.
Maersk employs 350 women sailors out of a total of 12,000 on its ships. The International Maritime Organization estimates that women make up only 1.28% of the world’s maritime workforce – or approximately 24,000 seafarers. This crew remained on board for two months or more, and many were at sea during the pandemic long after the end of their contracts, as ports refused permission to disembark.