DP World expects freight rates to fall another 15% to 20% in 2023, with weak demand leading to the worst, executive vice president and chief financial officer of Dubai-based global logistics company Yubrajnarayan, a person who
Narayan said there were first signs of a sharp drop in demand as authorities, including the International Monetary Fund (IMF), cut their growth forecasts, with shipping-side freight rates dropping significantly on certain routes.
Freight is the price at which cargo is delivered in a container from one point in the world to another.
The biggest problem lies in China, Europe and the United States, the world’s largest producers and consumers, said DP World’s Narayan in a bystander interview at the World Economic Forum (WEF) in Davos.
Narayan said fares for all vessels saw a significant drop in fares, between 20% and 50% from last year’s peak.
According to Narayan, this is due to three overarching factors, most notably disruptions during the COVID-19 pandemic, inflation in Europe due to rising energy prices, and severe disruptions to global supply chains.
Major port operator DP World has been in talks with the United Nations and Kyiv about providing a safe passageway for grain shipments out of Ukraine, but has yet to obtain the necessary permits.
Options to unblock Ukrainian grain exports from Black Sea ports and fertilizer and food exports from Russia were the subject of intense diplomatic negotiations last year.
Ukraine is one of the world’s leading grain producers and exporters, but hostilities in many regions and Russian port blockades have severely reduced its supplies.
Narayan also said the war in Ukraine has forced DP World to put its plans to invest in Russia on hold.
Source: Reuters Davos 2032