Investor Presentaiton

19 A.P. Moller-Maersk Annual Report 2020 Directors' Report Market update =1 Freight rates Freight rates, as measured by the China Composite Freight Index (CCFI), were on average 18% higher in 2020 compared to 2019 (chart 3). While global supply and demand was broadly balanced, the unprecedented demand pick-up on key headhaul trades such as Asia-US in H2 2020 together with vessel and equipment shortages and bottlenecks across the entire supply chain supported freight rates. Asia to US West Coast freight rates increased by 28%, and Asia to US East Coast rose by 18%. Freight rates also increased on the Asia to North Europe trades, albeit at a more moderate pace of 13%, but strengthened by 23% from Asia to Med- iterranean Europe. Uncertainties relating to the strength of container demand continue to pose a risk to the developments of freight rates in 2021, including the normalisation of the situation with vessel and equipment shortages and bottlenecks across the entire supply chain experienced in the last part of 2020. Bunker prices Towards the end of 2019, the industry's switch to 0.5% sulphur fuel oils amid a tight and nerv- ous market pushed low sulphur fuel oil prices higher. High sulphur fuel oil prices in Singapore and Rotterdam hence declined by 33% and 29% from 2019 to 2020, respectively, as market sup- ply and demand dynamics calmed and the pan- demic spread worldwide, averaging USD 273/ tonne and USD 248/tonne in 2020. Similarly, low sulphur fuel oil prices fell by 34% and 37% in Sin- gapore and Rotterdam from 2019 to 2020, aver- aging USD 371/tonne and USD 329/tonne, respec- tively. Lower sulphur 0.1%S marine gasoil prices followed the downwards trend as it dived 35% to USD 390/tonne in Singapore and 35% to USD 367/tonne in Rotterdam in 2020 over 2019. Fuel oil prices have not fallen as drastically as the rest of the refined oil products in light of the demand destruction from the global pandemic and are supported by the strong and robust container shipping industry. Singapore strengthened its position as the world's largest bunker port, with its total bunker sales increasing by an impressive 5% in 2020 amid a global pandemic and economic downturn. Bun- ker prices have experienced an extremely vola- tile period last year at the crux of the COVID-19-in- duced pandemic. The difference between the low sulphur 0.5% fuel oil and high sulphur 3.5% fuel oil spread, also known as the hi5, plunged drasti- cally since the start of the year, but there are signs that the spread may pick up in 2021 with Singa- pore continuing to be the more active pricing cen- tre followed by Rotterdam. A.P. Moller-Maersk expects further volatility in the fuel prices in major trading regions through mid-2021 during this uncertain period. North American container imports were 24% higher at the end of 2020, compared to the end of 2019 Chart 4 Idling Idle TEU as % of cellular fleet ☑ 12 Idle TEU м 10 10 8 16 4 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Terminals and Logistics & Services market update The other transport and logistics markets were in broad terms impacted by the dynamics and mar- ket drivers that steered the ocean industry, above all the COVID-19 pandemic. According to Drewry, port throughput volumes decreased by 2.1% in 2020, with ports in most regions recording nega- tive growth rates. In line with projections for ocean trade, global port throughput growth is expected to grow significantly in 2021. The container port industry continues to combat structural challenges stemming from the cascading of large container vessels, reinforced carrier alliances and capacity increases in many ports. The large shifts in global trade volumes in 2020 also impacted the broader logistics segment. While the deterioration of trade and country lockdowns in H1 led to a volume decline in most segments, the subsequent recovery, above all in the US, supported volume activity in the freight forwarding market. The air forwarding market additionally gained from increased e-commerce trading during the lockdowns.

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