DP World is a Dubai-based global logistics company with 300 business units located in 76 countries across the globe. Today at the World Economic Forum (WEF) in Davos, Switzerland, the company’s deputy chief executive and chief financial officer, Yuvraj Narayan, predicted freight rates to drop by a further 15% to 20% in 2023, with the worst still to come as demand slows.
Freight rates are the prices at which cargoes are delivered by container from one point of the globe to another. According to Narayan, the biggest problems were in China, Europe and the United States, as the world’s largest producing and consuming economies.
Narayan says there are three overriding factors at work: disruptions during the COVID-19 pandemic, inflation in Europe due to the energy price spike, and severe disruptions to global supply chains due to the war in Ukraine and sanctions against Russia.