AP Moller Holding chief executive Robert Maersk Uggla believes oversupply will impact the container market in the coming years.

“The market correction began at the end of 2022 as supply chain bottlenecks gradually eased. In addition, the oversupply of new container ships started to weigh heavily on freight rate sentiment,” Uggla said in a letter in the holding company’s annual report.

AP Moller Holding is the parent company of the AP Moller Group, which includes ownership in AP Moller-Maersk, Maersk Tankers, Danske Bank and Noble Corp.

“After the strong container shipping environment in recent years, this is a powerful reminder of the cyclical nature of shipping and how asset utilisation is partly a function of the industry’s newbuilding activities,” Uggla said.

AP Moller Group concluded 2023 with a consolidated revenue of $56bn. The net profit was $5bn, significantly down from the $29bn in 2022.

“With this in mind, and while container volumes are expected to grow in the coming years, some of AP Moller-Maersk’s competitors’ massive orderbooks are likely to weigh heavily on freight rates for several years,” Uggla added.

AP Moller Holding’s share of the result was DKK 19bn ($2.8bn), compared to DKK 83bn in 2022.

The investment company will pay a dividend of DKK 1bn to the AP Moller Foundation.

Last year was characterised by geopolitics, which affected the group’s operations.

“Geopolitics introduces considerable uncertainty to our group’s outlook,” Uggla said.

“Specifically for our group, 2023 ended with multiple distressing attacks on cargo ships in the vicinity of the Red Sea, including Maersk vessels.

“We are alarmed by the escalation of this tragic conflict, which will also hold far-reaching implications for global supply chains in the coming year,” Uggla said.

“In these difficult times, the safety of our seafarers is always at the forefront of our minds.”

A new geopolitical landscape is also likely to change the current trading world order, he warned.

“Shifting trade patterns are most apparent in the US, which has increased its share of imports from South East Asia and Mexico while reducing its share of imports from China,” Uggla added.

“Other trading relationships are likely to be reshaped over the coming years as the cumulative effect of geopolitics and industrial policies has begun to impact supply-chain decisions.

“Surveys of European and US businesses indicate an interest in relocating operations, and foreign direct investment flows into China have slowed sharply,” Uggla said.

AP Moller Holding was established in 2013 by the Maersk family as the investment arm of the AP Moller Foundation.

Its task is to manage the foundation’s commercial activities.

The company is headquartered in Copenhagen and has about 60 employees.