CMA CGM, a container transportation and shipping company based in France, has released its 2022 financial results, in which it evaluates last year’s shipping economy, forecasting this year’s course.
Looking back at last years scenery, CMA CGM separates 2022 in two halves, with the second half being indicative of this year’s situation. In particular, as stated by the company, in the first half of 2022, even though there was still a high demand for consumer products, global supply chains were affected by port congestion and other problems that limited shipping capacity.
On the second half, demand shock was accentuated in the fourth quarter by a wave of inventory destocking in the U.S. and the impact of persistent inflation on consumer spending. Moreover, the European energy crisis made the situation worse. The conflict between Russia and Ukraine (which resulted in the cessation of Russian services) and Asia’s early-year capacity shortage both had an adverse effect on intra-regional volumes. The drop in demand accelerated the last quarter’s return to average spot freight rates.
While market circumstances in the transport and logistics sector continue to deteriorate, second-half 2022 patterns persisted in 2023. Capacity is anticipated to rise in maritime transportation due to the arrival of new vessels and the reduction of port congestion.
… the company said.
However, the balance between supply and demand is anticipated to remain difficult. Demand prospects appear to be dubious due to the dealer inventory destocking in the US and the consumer purchasing power being under pressure.
Certain macroeconomic signals are stabilizing. In the U.S., consumer spending and the labor market remain resilient despite the very aggressive tightening pursued by the Federal Reserve in recent months. In the European Union, recession has been avoided for the moment. Some emerging markets in Latin America and Southeast Asia remain strong.
