Shipping cycles are being cut into amplified micro cycles: Maersk’s Asia head for ocean

[SINGAPORE] The global shipping industry has had its five-year boom-and-bust cycle shortened to a series of amplified micro-cycles, said Bhavan Vempati, Maersk’s head of Asia market for ocean products.

At a media briefing on Wednesday (Mar 4), the industry veteran, who has been with Maersk for 16 years, pointed out that the shipping cycle lasted for some years – even during the pandemic – but now there was no mega trend lasting for five years.

And demand has become “extremely” volatile in these recent years.

He cited the example of the impact of the United States tariffs when they were unveiled in April 2025, and subsequently a pause in these duties – which lasted a quarter.

“When the US tariffs were announced, the demand dropped by 30 per cent overnight from one day to another.

“When there was a truce announcement made, we (saw) the bookings increasing overnight by 300 per cent and it just shows the volatility we’re dealing with, with a 30 per cent drop, which sustained for a couple of months to a 300 per cent increase in bookings overnight. So I think (it) has been extremely volatile situation.”

When rebels attacked merchant ships in the Red Sea in late 2023 and prompted carriers to reroute through south of Africa, the impact was seen over a couple of quarters.

“We also see the issues of strikes and congestions and so on, causing also issues… for (a) couple of weeks… So there’s no more big mega trend impacting for five years. It’s still probably playing in the background, but we are seeing lot more amplification with this micro cycles.”

Maersk had in its results briefing in February announced plans to cut 1,000 jobs or 15 per cent of corporate roles and focus on cost discipline this year, as the container giant seeks to insulate its earnings against falling freight rates as the Red Sea routes were reopening in the earlier part of the year.

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The Business Times understands that the axe fell on Maersk’s Singapore office as well.

The Danish carrier is suspending its crossings in the Red Sea, given that the region is having military conflicts.

Elaine Low, Maersk’s South-east Asia managing director, said the company is still assessing the situation in the Middle East when asked about any increase in fuel cost or whether higher insurance premium has impacted its operations.