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

Thu, 02 Feb 2023

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 Europe Sun.

More Information

5 ℃

Partly Cloudy in Istanbul/Ataturk

International

Section

Musk, Tesla officials meet with White House to discuss EVs

WASHINGTON D.C.: The White House said this week that Tesla Chief Executive Elon Musk met with John Podesta, a Democratic ...

To boost tourist spending, Philippines to refund VAT starting in 2024

MANILA, Philippines: In an effort to attract more tourists, President Ferdinand Marcos has approved a value-added tax refund program for ...

Italy's Meloni in Libya, signs $8 billion gas deal

TRIPOLI, Libya: Italian prime minister Giorgia Meloni held talks on energy and migration in Libya this weekend, which are major ...

US south sees 1.3 million new residents in 2022

MIAMI, Florida: This decade, the US south is expected to see more new residents than any other region in the ...

Surge in air travel demand continues, may lessen, says observers

NEW YORK CITY, New York: After reporting record revenues in the fourth-quarter of 2022, US airlines expect strong travel demand ...

Philippines pledges review after citizen killed working in Kuwait

MANILA, Philippines: After a Filipina domestic worker was killed and dumped in the desert in the oil-rich emirate of Kuwait, ...

Business

Section

Report says US consumer spending fell in December wh

WASHINGTON D.C.: In the latest indication that its interest rate hikes are slowing the US economy, the Federal Reserve's main ...

China says shipments of smartphones in 2022 falls to lowest in decade

BEIJING, China: As COVID-19 restrictions and a slowing economy curbed consumer demand in 2022, China's smartphone sales witnessed a record ...

To reach out to public, Japanese vending machines selling whale meat

TOKYO, Japan: After struggling for years to promote its products amid protests from conservationists, Japanese whaling company Kyodo Senpaku announced ...

Air India begins update with purchase of nearly 250 aircraft

NEW DELHI, India: Marking a year since the Tata Group took control of Air India, the former state-run carrier has ...

Tech stocks lead U.S. markets rally, Nasdaq Composite climbs 191 points

NEW YORK, New York - A slowing of wages growth in the fourth quarter, as reported by the Labor Department, ...

Profits down 9% at American Express due to late customer payments

NEW YORK CITY, New York: As it sets aside more funds to cover potentially bad loans, American Express announced that ...

Movie Review

The Banshees of Inisherin

Banshees of Inisherin