The world\’s third largest shipping giant: shipping prices are expected to cool down in the second half of the year

Financial News Agency, May 18 (Editor Liu Rui) Under the influence of the intensification of the Red Sea crisis and the recovery of consumer demand in Europe, global shipping pressure has continued to rise in recent days.

Financial News Agency, May 18 (Editor Liu Rui) Under the influence of the intensification of the Red Sea crisis and the recovery of consumer demand in Europe, global shipping pressure has continued to rise in recent days.
The world\’s leading shipping companies such as Maersk, CMA CGM, and Hapag-Lloyd have recently disclosed information on increases in route freight rates. The price increases cover routes from Asia to Europe, North America, South America, and other directions.
However, on Friday local time, French CMA CGM, the world\’s third largest container shipping company, predicted that as the delivery of new ships accelerates, global shipping capacity will be boosted and shipping freight rates are expected to decline in the future. .
Shipping costs are expected to decline. CMA CGM wrote in the report that previously, due to the storm in the Red Sea, many ships were forced to reroute. At the same time, freight demand was better than expected, resulting in global shipping capacity being tight.
But this may not last long.
Ramon Fernandez, the company\’s chief financial officer, said on a conference call: The situation in the Red Sea absorbed almost all the new capacity that was put on the market in the first quarter.
He expects that rising freight pressure due to regional conflicts and strong consumer demand will decline in the second half of this year.
In January this year, as the risk of the situation in the Red Sea region intensified, global shipping prices soared.
Many ships traveling between Asia and Europe are forced to detour around the Cape of Good Hope, resulting in an increase in shipping routes and a decrease in shipping capacity.
After the outbreak of the Red Sea crisis, freight rates on many routes increased. However, as new ships purchased by major shipping companies are put into use, shipping capacity is gradually increasing.
Fernandez predicts that the global fleet will grow by 10% this year and will grow by about 7% in the future. This will lead to overcapacity in the maritime freight industry.
.The detour around the Cape of Good Hope will not be enough to absorb the excess capacity.
Shipping capacity is expected to increase. The financial report released by CMA CGM showed that the company’s profit in the first quarter was US$785 million, a sharp decline from US$2.01 billion in the same period last year.
Under the influence of the new crown epidemic, the global shipping industry will flourish in 2021 and 2022.
At that time, freight prices soared and profits of major shipping companies hit record highs.
With this windfall, CMA CGM and other shipping giants have increased their ship orders in the past two years, and these ships are currently in use.
In addition to CMA CGM, Maersk, the world\’s second largest container shipping company, has also recently predicted that there will be a general excess of global shipping capacity in the second half of this year. This means that freight rates will fall.

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