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 Broadcast Communications.

More Information

27 ℃

Mostly Cloudy in Seletar

Business

Section

China's major pig breeders face mounting debts, losses

BEIJING, China: Falling hog prices, mounting losses and rising debt are putting pressure on the biggest pig breeders in China, ...

Wall Street loses ground Wednesday, U.D. dollar gains

NEW YORK, New York - A decline in labor costs as measured by ADP failed to boost U.S. Markets Wednesday."ADP's ...

73,000 Chevrolet Volt cars being probed in US over loss of power

WASHINGTON D.C.: A U.S. auto safety regulator said this week it is opening an investigation into 73,000 Chevrolet Volt plug-in ...

New York state decides case, opens door for more marijuana clinics

NEW YORK: This week, a New York judge approved legal settlements to end lawsuits that halted the state's legal cannabis ...

Tech stocks outperform Tuesday, Nasdaq Composite gains

NEW YORK, New York - U.S. stocks spent most of Tuesday meandering, with the major indices closing out the day ...

Strike cost Ford 100,000 vehicles in sales, $1.7 billion in profit

DEARBORN, Michigan: This week, Ford said a six-week United Auto Workers (UAW) strike cut its sales by some 100,000 vehicles ...

Broadcasting

Section

Movie Review

The Circus

Circus