An oversupply of container shipping last year caused prices to drop after they had soared in 2022 due to capacity shortages amid high demand following the end of Covid pandemic restrictions, the Danish group said.

“The high demand eventually started to normalise as congestions eased, and consumer demand declined leading to an inventory overhang,” Maersk said in its annual earnings report.

This “correction” resulted “in rapid and steep declines in shipped volumes and rates starting” at the end of the third quarter of 2022, it added.

Maersk said its net profit reached $3.8 billion last year, slightly more than forecast by analysts but down sharply from the $29.2 billion logged in 2022.

Its revenue was also slightly above forecasts, reaching $51 billion compared to $81.5 billion the previous year.

The “oversupply challenges” in the maritime shipping industry is expected to “materialise fully” over the course of 2024, Maersk.

The group lowered its 2024 forecast for its core profit — earnings before interest, tax, depreciation and amortisation — to a range of between $1 billion and $6 billion.

“High uncertainty remains around the duration and degree of the Red Sea disruption with the duration from one quarter to full year reflected in the guidance range,” Maersk said.

Maersk and other shipping companies have decided to redirect shifts away from the Red Sea, making them take the longer and costlier route around the southern tip of Africa.

The Red Sea normally carries about 12 percent of global maritime trade.

Yemen’s Iran-backed Huthi rebels have targeted ships crossing the Red Sea since last year, saying their campaign was in solidarity with Palestinians in the war between Israel and Hamas.