News / Maersk withdraws TP20 service and ups profit guidance

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As congestion continues to mount across the major deepsea east-west trades and capacity is increasingly hard to find for shippers and their logistics suppliers, Maersk has announced it is to suspend its TP20 Asia-US east coast service.

A statement from the Danish carrier suggested it needed the TP20 capacity elsewhere in its network.

It said: “TP20 was introduced to complement our Asia to/from the US east coast offering. However, due to the ripple effects of the ongoing Red Sea situation, including delays and capacity constraints, we are required to reorganise the network to best meet our customers’ needs.

“As part of this, we will wind down the TP20 service.”

It added that the last eastbound sailing would be the 3,400 teu BSG Barbados, set to depart Shanghai on 13 June, and the final westbound voyage will be on the same vessel when it departs Newark on 17 July.

Maersk’s standalone TP20 was introduced during the summer of 2021, at the height of the pandemic. It was suspended in September 2022 as demand began to tail off, but was reintroduced in March this year in response to the growing capacity constraints precipitated by the Red Sea crisis.

According to the eeSea liner database, the service deploys 10 vessels with an average capacity of 4,300 teu, and has lately been operating a stripped-down port rotation of Shanghai-Yantian-New York-Baltimore-Houston.

In a separate development, Maersk this morning revised its full-year earnings guidance upwards, a result of the recent spike in spot rates and mounting operational challenges in container supply chains.

It said it now expected to deliver an underlying Ebitda of $7bn-$9bn in 2024, up from its previous guidance of $4bn-$6bn, and an Ebit of $1bn-$3bn, up from the previous breakeven to a $2bn loss.

Maersk now also expects to generate free cash flow of at least $1bn, after previously forecasting a $2bn cash outflow.

“On the back of continued strong container market demand and the disruption caused by the ongoing crisis in the Red Sea, AP Møller-Mærsk now also sees signs of further port congestions, especially in Asia and the Middle East, and additional increase in container freight rates.

“This development is gradually building up and is expected to contribute to a stronger financial performance in the second half of 2024,” the company said.

“Trading conditions remain subject to higher than normal volatility, given the unpredictability of the Red Sea situation and the lack of clarity of future supply and demand,” it added.