A.P. Moller-Maersk is raising the lower end of its 2024 outlook it first announced in February, ushering in a positive sign for the wider container shipping industry amid ongoing disruptions in the Red Sea.

The container shipping giant also now anticipates total container volume growth to be in the upper end of its previously expected 2.5-percent-to-4.5-percent range.

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The ocean freight company unveiled improved forecasts for its profit metrics, highlighting underlying EBIT (earnings before interest) that is expected to range between no growth and a $2 billion loss—an improvement from the previous guidance that called for losses of as much as $5 billion.

Maersk’s revenues fell 13 percent in the first quarter to $12.4 billion from a year earlier. Underlying income plummeted to $210 million this quarter from $2.6 billion in the year-ago period.

In a statement, Maersk CEO Vincent Clerc said the first quarter is developing “precisely as we expected.”

“Demand is trending towards the higher end of our market growth guidance and conditions in the Red Sea remain entrenched,” said Clerc. “This not only supported a recovery in the first quarter compared to the previous quarter, but also provide an improved outlook for the coming quarters, as we now expect these conditions to stay with us for most of the year. However, we still anticipate the high number of new vessels being delivered during this and next year to eventually offset these factors and put the ocean markets under renewed pressure.”

Maersk said the ongoing situation in the Red Sea and the neighboring Gulf of Aden is expected to continue into the second half of the year, mirroring similar opinions like that of fellow Gemini alliance member Hapag-Lloyd and freight forwarding giant DB Schenker, both of whom expect the conflict to linger through the close of 2024.

Despite the continued risks to supply chains, demand for container trade increased in the first quarter, the company said in its annual report. Global container demand is estimated to have grown between 7 percent and 9 percent year over year, with all import regions contributing positively, Maersk said.

This container demand growth is expected to remain positive in coming quarters, but likely at a slower pace than the first quarter, according to the company.

“On the supply side, growth remained sustained in Q1 2024, driven by significant deliveries,” Maersk said in its quarterly report. “At the end of the quarter the nominal fleet was 9.6 percent larger than at the same time in 2023, while inactive capacity dropped to levels not seen since the first half of 2022. The influx of newbuild capacity and the decline in the inactive fleet helped carriers tackle the pressure from the Red Sea/Gulf of Aden situation.”

According to data from shipping research tool and database Alphaliner, Maersk has 29 ships that are still yet to come online that can carry a total of 385,686 20-foot equivalent units (TEUs), representing 9 percent of its existing capacity.

This total is well behind competitors like Mediterranean Shipping Company (MSC), CMA CGM and Cosco, which are bringing 105, 93 and 40 vessels online, respectively.

In lagging its competitors in shipbuilding, Maersk has sacrificed its schedule reliability rates as it avoids the Suez Canal. Maersk ships only arrived on time in 49 percent of departures, representing a drop of 16.1 percent compared to the end of last year and only ranks 10th among the 13 largest shipping companies.

The Red Sea disruptions have meant more ship diversions and longer transit times, resulting in an industrywide jump in ocean freight rates from the end of 2023. In the first quarter, Maersk’s average freight rate increased by 23 percent compared to the end of last year.

However, ocean freight spot rates on the whole appear to have finally stabilized after skyrocketing during the December and January months when the Houthi attacks escalated, before sinking again from February through April.

As of Thursday, the Drewry World Container Index (WCI) said the going spot rate for a 40-foot container was $2,725, up 1 percent from the week prior. Of all eight trade lanes measured by the WCI, the only one to experience a more than 2 percent swing week over week was the Shanghai-to-Genoa route, which saw rates jump 3 percent to $3,717 per container. Four of the trade lanes saw roughly flat week-over-week changes.

Across all trade lanes, the WCI is down 2.5 percent since April 11.