“Softening consumer spending has dragged down shipping demand and freight rates,” shipping giant CMA CGM said on Friday after reporting further gains in quarterly profits.

France-based CMA CGM, one of the world’s largest container lines, posted its net profit of $7.6 billion in the second quarter, up from $3.5 billion in the same period last year and 72% in the same period in the first quarter, reporting over $100million.

Higher container revenues helped offset higher operating costs in the previous quarter, including a nearly 75% year-over-year increase in vessel fuel costs.

CMA CGM said, like its peers, the shipping industry is starting to feel economic pressure, with strong demand for seafreight cooling since the coronavirus pandemic.

CMA CGM Chairman and CEO Rodolph Saade said:”The global slowdown in consumer spending was already noticeable this summer, but the second half of the year saw international trade conditions worsen. It will become more normal and transport demand will decrease,”he mentioned in its financial statements. CMA CGM added that spot freight rates have fallen in some areas due to slowing demand in recent weeks.

The volume of containers shipped by the Group increased by 6% from the first quarter, but declined by 1.3% year-on-year in the second quarter due to continued port congestion.

The group, which is run privately by the Saade family, has soared in profits, prompting the French government to urge the company to ease inflationary pressures this year. CMA CGM responded with discounted shipping for shipments to France.

The group, which reinvests 90% of his profits back into the business, has also expanded beyond ocean logistics, becoming a shareholder of Air France-KLM earlier this year as part of an air cargo partnership.

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Source: Reuters