Shipping businesses to see rough waters ahead: scion
Rodolphe Saade, the billionaire head of the world’s third-largest container shipping line, warned that the industry is entering a choppy period as new vessels ordered during the pandemic shipping boom enter service next year.
“The difficulty in our sector is that we have a number of container ships that will come into the market starting next year, and that runs the risk of creating an imbalance between supply and demand,” Saade, chief executive officer of Marseille-based shipping giant CMA CGM SA, said in an interview.
He was speaking on Friday at an event in Paris to mark the creation of a nonprofit artificial intelligence research lab that is being backed by the company his family controls.
The outlook for the shipping sector has darkened considerably in recent months, with some of the largest container lines including AP Moller-Maersk A/S, Hapag-Lloyd and CMA CGM publishing significant slumps in third-quarter earnings and outlining plans for cost-cutting. Some have said that they fear the decline would last through next year.
“We’re expecting between 2 percent and 3 percent of trade growth next year,” Saade said, adding that CMA CGM is “financially solid” with significant market share in countries in which it is operating that would help it weather the difficulties.
“The shipping industry is used to these highs and lows. It’s completely cyclical,” he said. “We had excellent results in 2021 and 2022. Now we’re entering more normal times and we’re equipped for that.”
CMA CGM has used its pandemic windfall to invest and expand, acquiring ports, logistics and air transport assets, including its biggest-ever deal to acquire Bollore SE’s logistics arm for an enterprise value of US$5.4 billion.
Closely held CMA CGM was started by his father, Jacques, and the family remains in control. Under Rodolphe, the company has diversified into the media, buying newspapers such as La Tribune and La Provence.
Source: The Taipei Times