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00:00WE UNDERSTAND ENTIRELY WHY YOU ' VE TAKEN THE ACTION YOU HAVE AROUND RUSSIA AND EVERY OTHER EUROPEAN BUSINESSES HAVE DONE THE SAME. WE SEE THE FINANCIAL IMPACT, MORE THAN $700 MILLION LOSS FROM RUSSIA IN THE FIRST QUARTER, CAN YOU GIVE US A SENSE OF HOW CHALLENGING IS BEEN FOR THE BUSINESS TO TAKE THESE ACTIONS ON RUSSIA? SOREN: FROM MAERSK, A RUSSIAN BUSINESS SOMEWHERE AROUND 2%. IT IS RELATIVELY MINIMAL IMPACT. WE ARE WRITING DOWN ALL THE ASSETS WE HAVE AN RUSSIA TO ZERO IN THE FIRST QUARTER. WE ON SOME WAREHOUSES AND A FEW OTHER THINGS IN RUSSIA. WE DECIDED TO WRITE IT ALL DOWN DURING THE QUARTER. HOPEFULLY WE WILL REGAIN SOME OF THAT AS WE DIVEST THE ASSETS IN THE COMING QUARTERS. ANNA: YOU SAID BACK IN MARCH THAT YOU WANTED TO SELL THE THINGS YOU HAVE IN RUSSIAN PORTS. HE SAID THERE IS A HOPE THEY BEAT THAT YOU GET SOME VALUE FOR THEM, NO EXPECTATION OF THAT AT THE MOMENT? SOREN: WE ARE IN NEGOTIATIONS WITH SEVERAL PARTIES. WE WILL SEE. IT IS A COMPLICATED SITUATION, THERE ' S ALSO SANCTIONS AND SO ON THAT WE HAVE TO ABIDE BY. IT WILL TAKE A WHILE I SUSPECT FOR THOSE TALKS. ANNA: LET ' S BROADEN THE CONVERSATION, ON THE STATE OF THE CONTAINER MARKET AT THIS POINT, A SENSE OF NORMALIZATION? WHEN WE LAST SPOKE IN VIBRATE, YOUR THINKING ABOUT NORMALIZATION SECOND HALF OF THE YEAR, ACKNOWLEDGING THINGS WERE UNCERTAIN COMING OUT OF A GLOBAL PANDEMIC. THINGS ARE STILL UNCERTAIN, OF COURSE. DO YOU STILL EXPECT TO SEEK NORMALIZATION IN THE SECOND HALF? SOREN: WE HAVE BASED OUR GUIDANCE FOR THE FULL YEAR ON ON THAT ASSUMPTION. THE FIRST QUARTER HASN ' T DONE MUCH TO HELP. WE STILL HAVE SOMEWHERE AROUND 10% OR 12% OF CLONAL -- GLOBAL CONTAINER SHIP CAPACITY TIED UP WAITING OUTSIDE PORTS AROUND THE WORLD. THAT IS NOT AVAILABLE TO THE MARKET. IT WILL BECOME AVAILABLE AT SOME POINT. WE SEE IMPROVEMENTS ON THE U.S. WEST COAST, WHICH WAS A HUGE ISSUE A FEW MONTHS BACK. THE PROBLEMS OF GETTING LABOR TO GET BACK TO GET PEOPLE TO WORK IN THE WAREHOUSES. THAT REMAINS AN ISSUE. NOW WE START TO SEE IMPACT IN CHINA AS WELL FROM THE LOCKDOWNS. ANNA: DO YOU THINK FREIGHT RATES WILL REMAIN ELEVATED INTO THE SECOND HALF OF THE YEAR? AND MAY BE BEYOND? SOREN: IN THE CASE OF MAERSK, WE HAVE CHANGED THE BUSINESS SIGNIFICANTLY AND HAVE A MUCH LARGER PART OF BUSINESS ON LONG-TERM CONTRACTS. WE HAVE A LOT LESS DEPENDENT ON WHAT HAPPENS TO SHORT-TERM FREIGHT RATES. IT STANDS TO REASON, AS MORE CAPACITY GETS FREED UP FROM WAITING, THIS WILL ALSO IMPACT THE FREIGHT RATES AND A DOWNWARD DIRECTION. THEY HAVE COME SLIGHTLY OFF ITS PEAK ABOUT A QUARTER AGO, THEY ARE STILL AT AN ELEVATED RECORD HIGH. ANNA: SPEAKING OF THAT, WHAT IMPACT YOU ARE SEEING FROM CHINA ON YOUR BUSINESS, CAN YOU TELL ME WHAT IS THE BIGGEST PROBLEM YOU ARE SEEING IN CHINA AT THIS POINT? THE ONGOING FIGHT AGAINST COVID-19 THERE? SOREN: THE CHINESE STRATEGY IS TO TRY TO ELIMINATE EVERY INSTANCE OF COVID BY STRONG LOCKDOWN MEASURES. WE ARE SEEING THE IMPACT ON THE BUSINESS IN THE SENSE THAT WE ARE LACKING LABOR AND WAREHOUSES, AND CAPACITY. THE PORTS ARE OPEN. BUT OF COURSE, IT ONLY WORKS IF THE LANDSIDE IS ALSO, THE TRUCKING AND LONGSHOREMEN, WE ARE SEEING A NEGATIVE IMPACT ON OUR VOLUMES OUT OF CHINA RIGHT NOW FROM THE COVID-19 LOCKDOWNS. NOT AS MUCH AS YOU MAY EXPECT, BUT WE HAVE CERTAINLY SEEN AN IMPACT. ANNA: LAST TIME WE SPOKE, WE WERE TALKING ABOUT AREAS WHERE THE CONTAINER MARKET WAS LOOKING CONGESTED, YOU CITED L.A. AND LONG BEACH, YOU SAY YOU ' VE SEEN AN IMPROVEMENT THERE IS UP WHERE IN THE WORLD IS YOUR CURRENT CONCERN WHEN IT COMES TO THE CONTAINER MARKET? SOREN: LOS ANGELES IS STILL CONCERN. IT IS SIGNIFICANTLY IMPROVED. WE ARE SEEING MORE CONGESTION ON THE U.S. EAST COAST. AS IT HAS EASED A BIT ON THE WEST COAST. WE BELIEVE THAT MAY BE BECAUSE WE SEE MORE AND MORE OF OUR CUSTOMERS USING THE EAST COAST AS A GATEWAY INTO THE U.S. IN EXPECTATION OF -- OR MITIGATION AGAINST A POTENTIAL LABOR DISRUPTION THAT WE COULD HAVE ON THE U.S. WEST COAST THIS YEAR AS NEW NEGOTIATIONS ON COLLECTIVE BARGAINING AGREEMENTS KICKS OFF IN MAY. WE ARE ALSO SEEING THINGS GO RELATIVELY SLOW IN EUROPE. WE ALREADY DISCUSSED CHINA. ANNA: WE TALKED IN THE PAST ALSO ABOUT YOUR EXPECTATIONS ABOUT PLANS TO BECOME FULLY INTEGRATED LOGISTICS PROVIDER, AND THE DEALS BY PILOT FREIGHT SERVICES, WHERE DOES THAT COLTS STAND OUT? ARE YOU LOOKING FOR FURTHER DEALS ON THAT FRONT? -- WHERE DO THOSE GOALS STAND NOW. ARE YOU LOOKING FOR FURTHER DEALS ON THAT FRONT? SOREN: WE HAD 44% GROWTH ON THE FIRST QUARTER, MORE THAN 33% OF THAT BEING ORGANIC. WE GREW MORE THAN 30% ORGANICALLY IN LOGISTICS. WITH TWO THAT WE CLOSED WITH PILOT EARLIER THIS WEEK, WE STILL HAVE LOGISTICS IN ASIA AND GERMANY TO CLOSE TRANSACTIONS ABOUT A QUARTER AGO. I THINK WE RIGHT NOW PROBABLY WOULD BE INTEGRATING THE THREE ACQUISITIONS WE HAVE ONGOING. THEN WE WILL CONTINUE PROBABLY WITH -- TO ACQUIRE MORE CAPABILITIES IN THE LOGISTIC SPACE SO CAN CONTINUE TO SUPPORT THE RAPID GROWTH WE HAVE WITH OUR CUSTOMERS IN LOGISTICS.

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Maersk CEO Counts the Cost of Russia Exit

A.P. Moller-Maersk A/S Chief Executive Officer Soren Skou discusses first quarter results, congestion issues and sanctions. He speaks with Bloomberg's Anna Edwards on "Bloomberg Markets: Europe." (Source: Bloomberg)

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