More warning signals on cooling off the freight market and shipping demand emerged. The French shipping major CMA CGM SA warned of a steep fall in demand until this year, extending a slump that resulted in a more than halving of quarterly profit.
A downturn that started in the second half of last year “remained at play this year, as market conditions in the logistics and transport industry continue deteriorating, the third-largest container line in the world, controlled by Rodolphe.
Saade, the billionaire, and his family mentioned in a statement, per Bloomberg.
The firm also cited a steady decline in freight rates, economic uncertainty, and geopolitical tensions.
The bleak outlook from the France-based transporter is in line with its European shipping rivals Hapag-Lloyd AG and A.P. Moller-Maersk.
It pointed to a cooling period in the notoriously cyclical shipping market.
Covid-19 fuelled a surge in consumer demand for items that snarled worldwide supply chains, propelling shipping profits and freight rates to unforeseen levels.
These significantly weakened at the end of 2022.
CMA CGM’s net income reportedly more than halved to $3.04 billion in the fourth quarter from about $6.71 billion in the final three months of 2021.
Despite the drop, the full-year profit registered in 2022 increased to a record $24.9 billion, surpassing 2021 profit figures of $17.9 billion.
The balance between demand and supply is expected to be challenging, as capacity is most likely to increase, the firm said, pointing to an easing of port congestion and the delivery of new vessels in shipping and higher cargo capacity on planes.
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