Maersk chairman sees Russia’s economy suffering for many years

A.P. Moller-Maersk A/S’s decision to leave Russia will be expensive, but it’s the right call from both a moral and financial point of view, according to the transport giant’s outgoing chairman.

“Russia will face many, many years of challenges,” Jim Hagemann Snabe said in an interview on Tuesday. The country is set to face long-term difficulties as former trade partners find alternatives to Russian energy and wheat exports that will remain in place long after the war ends, he said.

Maersk has responded to the war by announcing it will sell its holdings in four Russian ports and has also stopped taking new orders for container shipments to and from Russia. The company, which controls about 17% of the world’s container freight, has also dropped all intercontinental rail bookings between Asia and Europe.

Exiting Russia will be “expensive” for Maersk but also makes sense because the country’s economy won’t grow “for a very long time,” Snabe said.

“It’s a decision based on morals but it’s also financially sound decision in the longer term,” he said. “Maersk has a strong track record of dealing with crisis as it has been doing that all over the world throughout its history.”

Snabe will step down as chairman later on Tuesday at Maersk’s annual general meeting, paving the way for Robert Maersk Uggla, the great-grandson of the company’s founder, to take over.

Maersk has said the war is starting to indirectly affect global trade patterns, causing delays and thereby stressing supply chains which still haven’t recovered from the pandemic. Trade concerns increased on Sunday when China placed the 17.5 million residents of Shenzhen into lockdown over a Covid-19 outbreak.