Expect freight costs to drop due to low demand, says observers

Robert Besser
21 Jan 2023, 21:24 GMT+10

DP World's chief financial officer Yuvraj Narayan said the Dubai-based logistics company expects freight costs to drop by a further 15 to 20 percent in 2023
As agencies, such as the International Monetary Fund, lowered growth forecasts, the first signs of a significant drop in demand were clear to see
China, Europe and the US, as the world's largest producing and consuming economies, are the main problems, Narayan said

DAVOS, Switzerland: In an interview with Reuters on the sidelines of the World Economic Forum in Davos, DP World's chief financial officer Yuvraj Narayan said the Dubai-based logistics company expects freight costs to drop by a further 15 to 20 percent in 2023, and the worst is still to come as demand further declines.

As agencies, such as the International Monetary Fund, lowered growth forecasts, the first signs of a significant drop in demand were clear to see, as freight rates on the shipping side had declined considerably on certain routes, he added.

"It is clear that there is a massive drop in demand, inventories are not clearing up, and the orders are not coming through. We have not seen the worst of it yet," Narayan added.

China, Europe and the US, as the world's largest producing and consuming economies, are the main problems, he added, stressing that various shipping rates have witnessed significant declines of anywhere between 20 and 50 percent from their peaks in 2022.

There were three overriding factors driving this issue, which are disruptions during the COVID-19 pandemic, inflation in Europe due to the energy price surge, and severe disruptions to global supply chains, which persist as a result of the war in Ukraine and sanctions against Russia, Narayan said.

Watch latest videos

News RELEASES

Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Greek Herald.

More Information

3 ℃

Mostly Cloudy in Elefsis

International Business

Section

102,000 job firings in US high tech in December, according to report

WASHINGTON D.C.: A report released this week detailed how, in January, layoffs in the US reached a more than two-year ...

Shell Oil reveals record $40 billion profit in 2022

LONDON, England: Energy giant Shell Oil has announced a record profit of nearly $40 billion in 2022, capping an eventful ...

Seeking to stem losses, Intel to cut executive salaries

SANTA CLARA, California: One week after Intel forecasted lower-than-expected sales caused by a loss of market share to rivals and ...

Biden plan seeks to cut credit card fees, charges for apps

WASHINGTON D.C.: As part of a wider policy drive to increase competition in consumer markets, President Joe Biden has announced ...

Washington ends export licenses for supplying China's Huawei

WASHINGTON D.C.: The Biden administration has stopped issuing export licenses to US companies seeking to ship most items to China's ...

Concerns about recession in Germany after economy shrinks in Q4

FRANKFURT, Germany: Data released this week showed that the German economy unexpectedly shrank in the fourth quarter of 2022, indicating ...

Mediterranean

Section