Fashion Industry Driving Demand for Green Shipping, Maersk Says

Containers are seen on the Maersk's Triple-E giant container ship Majestic Maersk, one of the world's largest container ships, next to cranes at the APM Terminals in the port of Algeciras, Spain January 20, 2023. REUTERS/Jon Nazca/File Photo
Containers are seen on the Maersk's Triple-E giant container ship Majestic Maersk, one of the world's largest container ships, next to cranes at the APM Terminals in the port of Algeciras, Spain January 20, 2023. REUTERS/Jon Nazca/File Photo
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Fashion Industry Driving Demand for Green Shipping, Maersk Says

Containers are seen on the Maersk's Triple-E giant container ship Majestic Maersk, one of the world's largest container ships, next to cranes at the APM Terminals in the port of Algeciras, Spain January 20, 2023. REUTERS/Jon Nazca/File Photo
Containers are seen on the Maersk's Triple-E giant container ship Majestic Maersk, one of the world's largest container ships, next to cranes at the APM Terminals in the port of Algeciras, Spain January 20, 2023. REUTERS/Jon Nazca/File Photo

Fashion brands are a key driver of demand for green shipping fuels, according to shipping group Maersk (MAERSKb.CO), as the sector faces pressure from consumers and regulators to reduce their climate footprint.

Retailers ship huge volumes of clothes from production centres in countries such as China, Vietnam and Bangladesh to consumers around the world, causing carbon dioxide emissions, according to Reuters.

Overall, the textile industry is estimated to be responsible for between 2% and 8% of global greenhouse gas emissions, according to a United Nations Environment Programme report published last month.

The shipping industry, which itself aims to achieve net-zero emissions by 2050, has begun offering low-emission fuels such as biofuels made from cooking oil and food waste or methanol produced from renewable energy as an alternative to fuel oil.

The fashion industry accounted for 26% of the more than 240,000 containers that Maersk shipped last year using biofuels under its ECO Delivery contracts, making it the biggest sector using the low-emission fuel service, the company said.

"Many of the fashion brands have actually been the ones going for this," Josue Alzamora, global head of lifestyle vertical at Maersk, told Reuters at this week's Global Fashion Summit in Copenhagen.

"Of course, fashion companies also feel the pressure from consumers," Alzamora said.

Nearly one out of 10 containers Maersk, the number two global ocean container shipping firm, handled for owners of fashion brands last year was shipped using biofuels, he said.

The ECO Delivery contracts are sold at a premium to regular shipping.



H&M Abandons 2024 Earnings Margin Target, Q3 Profit Lags

People walk past a closed H&M clothing store in Omsk, Russia, March 3, 2022. REUTERS/Alexey Malgavko
People walk past a closed H&M clothing store in Omsk, Russia, March 3, 2022. REUTERS/Alexey Malgavko
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H&M Abandons 2024 Earnings Margin Target, Q3 Profit Lags

People walk past a closed H&M clothing store in Omsk, Russia, March 3, 2022. REUTERS/Alexey Malgavko
People walk past a closed H&M clothing store in Omsk, Russia, March 3, 2022. REUTERS/Alexey Malgavko

H&M, the world's second-largest listed fashion retailer, said on Thursday it no longer expected to reach its full-year earnings margin goal, while reporting a lower-than-expected operating profit for the June-August period.

H&M has struggled to boost its profitability amid high inflation and stiff competition from its bigger Spanish rival Zara, owned by Inditex, and the rapid growth of cut-price online fast-fashion retailer Shein.

"At present we estimate that this year's operating margin will be lower than 10%," Chief Executive Daniel Erver said in a statement.

The accumulated margin stood 7.4% for the first three quarters.

The full-year operating margins for 2022 and 2023 were 3.2% and 6.2% respectively, and H&M had cautioned in June that factors such as materials costs and foreign currency had made the 2024 target more difficult to reach.