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MSC chief Toft warns of ‘some difficult quarters ahead’

Photo: MSC Soren Toft CEO of MSC
Soren Toft, CEO of MSC
Mediterranean Shipping Co. (MSC) boss Soren Toft has warned of some difficult times ahead for the container shipping sector.

Taking to social media to share his thoughts on how the market and MSC were developing at the end of the third quarter Toft, CEO of MSC, commented that the market was “normalising”.

Following unprecedentedly high container shipping spot freight rates last driven by supply chain disruption rates on some trades have fallen by as much as two-thirds in recent months and this now bleeding into contract rates as shippers pushed for renegotiations.

Toft also noted external macro-economic pressures which will put pressure on cargo shopping. “But we are also seeing rising inflation, rising interest rates and rising energy prices, so there will no doubt be some difficult quarters ahead,” he warned.

MSC has been acting to cut capacity with blank sailings and at the end of last month announced it would be suspending its Sequoia service as part of the 2M alliance linking China and Korea with US West Coast ports. The company noted “significantly reduced demand for shipments into the US West Coast during the past weeks”.

Although warning of difficult quarters ahead Toft also flagged MSC’s continued expansion with the “big news” of Q3 being the move to develop MSC Air Cargo. “It adds a new dimension to the company,” he said.

Looking ahead the expansion of services that connect to ocean shipping by MSC are set to continue. “However, there are lots of reasons to stay positive, and we are developing other solutions, not only air cargo, but also on the land side to expand our service offering further,” Toft said.

TAGS: Europe MSC