‘Tough period’ warning from billionaire container boss

The challenges facing the global economy continue to challenge many sectors. The logistics sector is one of the industries most affected by the contraction of global trade.

Finally, Rodolphe Saade, one of the world’s biggest logistics bosses, warned that the sector is entering difficult times.

ENTERING A WAVY PERIOD

Saade, the billionaire boss of the world’s third-largest container line, warned that the industry will enter a volatile period when new ships ordered during the pandemic period enter service in 2024.

“The challenge in our industry is that a number of container ships entering the market from next year risk creating an imbalance between supply and demand,” said Saade, chief executive of shipping giant CMA CGM, based in Marseilles.

At an event in Paris on Friday, Saade said: “We expect low trade growth next year. The maritime industry is used to these ups and downs. It is completely cyclical. “We achieved excellent results in 2021 and 2022, now we are entering more normal times and we are equipped for it,” he said.

THINGS ARE WORSE

The rise of the pandemic and the current crisis have already caused some readjustment in the industry. Earlier this year, Maersk and Mediterranean Shipping, the world’s largest container lines, announced they would end their ship-sharing partnership after a decade as their competition in global logistics intensified.

In the third quarter of this year, some of the largest container lines, such as AP Moller-Maersk Group, Hapag-Lloyd and CMA CGM, saw significant drops in profits. Companies have announced cost-cutting plans and the outlook for the shipping industry has worsened significantly in recent months. Experts fear that the decline will continue until 2024.