Higher freight rates more than offset modest container volume gains as A.P. Moller-Maersk saw revenue and profits improve in the third-quarter.

Ocean segment revenue increased to $15.8 billion in the quarter ended Sept. 30 from $12.1 billion in the year-ago quarter, the Copenhagen, Denmark-based parent of liner operator Maersk said in an earnings release. Earnings before interest and taxes of $2.8 billion reversed a loss of $27 million on disruptions to shipping from attacks by Yemen-based Houthi rebels in the Red Sea.

Cargo also was diverted to U.S. West Coast ports to avoid an eventual strike by union longshore employees that briefly shut down container handling at East Coast ports in early October.

The attacks have led carriers to divert vessels around the Red Sea route on longer voyages around Africa’s Cape of Good Hope. Maersk said this resulted in 14% higher bunker fuel consumption y/y, with total operating costs up 6.7%. These were passed on as average freight rates increased 54%, peaking at the beginning of the third quarter.

But the second-largest container carrier said its loaded volumes edged up 0.3% from Q3 2023, lagging its estimated global growth of 4%-6% y/y.

“[Maersk’s] average operated fleet has grown 2.3% compared to a year ago – and given how the Red Sea crisis has caused the need to go much longer distances, this is insufficient growth to match the requirement to maintain weekly capacity, and is likely a key reason why their marketshare in loaded volumes has declined,” Lars Andersen, chief executive of consultant Vespucci Maritime, posted on LinkedIn.

Maersk said volumes slipped 3.1% on east-west routes but climbed 7.6% on intraregional services.

Ocean operating EBIT margin was 6.4% over the past 12 months, ahead of the company’s full-year 2024 6% target. Maersk raised guidance on earnings before interest, taxes, depreciation and amortization to $11 billion-$11.5 billion from $9 billion-$11 billion, and EBIT to $5.2 billion-$5.7 billion from $3 billion-$5 billion. Free cash flow is pegged at $3 billion, up from $2 billion.

The Logistics & Services business saw quarterly revenues increase 11% on continued volume growth across most products. The company opened its largest Middle East logistics park in Jeddah, Saudi Arabia, and added a new Boeing 777F aircraft to its fleet. Growth totaled 2% for the past 12 months, below the company’s 10% target.

Supply chain volumes were ahead by 21% and First Mile volumes by 9.6% while airfreight declined by 2.4% y/y.

The Terminals segment posted all-time highs in revenue and volume, including 20% more cargo at Los Angeles and Port Elizabeth, New Jersey. EBITDA was highest since Q1 2022 at $424 million. The company revised its outlook segment return on invested capital in 2024 to 13% from 9%.