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 Middle East Star.

More Information

16 ℃

Fair in Dubai

International Business

Section

South Korean exports fall 2.7% in first 20 days in January

SEOUL, South Korea: Korea Customs Service data released this week showed that South Korean exports for the first 20 days ...

Ireland had highest EU budget surplus in third quarter 2022

DUBLIN, Ireland: Ireland reported a higher budget surplus than any other country among the 27-member European Union for the third ...

As yearly output declines, experts say US manufacturing in recession

WASHINGTON D.C.: Based on a range of measurements, US manufacturing could have entered a recession in the fourth quarter of ...

US Wolfspeed to build $2.17 billion chip factory in Germany

FRANKFURT, Germany: German media has reported that American power chipmaker Wolfspeed Inc is planning to build a factory in Germany, ...

Japan employers agree with prime minister to raise wages

TOKYO, Japan: More than half of major Japanese companies are planning to raise wages this year, after Prime Minister Fumio ...

Taiwan Q4 GDP plunges to lowest in 13 years

TAIPEI, Taiwan: Highlighting its worst performance in 13 years, Taiwan's trade-dependent economy contracted in the fourth quarter, affected by declining ...

International

Section