Freight rates are plummeting from their formerly sky-high position as the industry starts to stabilise as a result of the global slowdown.
In an illustration of this trend, CMA CGM’s Q1 volumes saw revenue plummet 40%, with volumes falling from 5.3m teu in Q1 22 to 5.02m. And, in a further demonstration of this shift, CMA CGM warned that the Q1 result, despite being weaker than the same period in 2022, will probably be the best achieved in 2023.
“After two exceptional years, our industry has entered a phase of normalisation"
“After two exceptional years, our industry has entered a phase of normalisation, due to the slowdown in global growth, inflation and a de-stocking phenomenon that is continuing in many parts of the world.”
Rodolphe Saadé, CEO, CMA CGM
This trend can be seen across the sector. Forwarder John McCown has calculated that revenues dropped to $13bn in Q1 23 across the container industry, almost 78% less than the 58.7bn recorded in Q1 22.
However, CMA CGM is not despondent in the face of the plummeting figures. “Despite this deteriorated context, our first-quarter results are extremely solid,” says Mr Saadé. “They are the fruit of our investments – more than $30bn committed over the past two years – which enable us to constantly broaden and strengthen our range of transport and logistics solutions.”
As the pandemic effect on consumer spending and e-commerce diminishes, we can see that the CMA CGM results are in keeping with industry expectations. With rising inflation eating into household budgets and reducing demand, Maersk Line has recently warned that the peak season may fail to materialise.