Under the influence of the worsening crisis in the Red Sea and the recovery of consumer demand in Europe, the pressure on global shipping has continued to rise recently. Maersk, CMA CGM, Hapag-Lloyd and other leading shipping companies in the world have recently disclosed airline freight rate increase information, price increases cover Asia to Europe, North America, South America and other directions of the route.

    However, on Friday local time, the world's third largest container shipping company, France CMA CGM Shipping company, in announcing its first quarter earnings forecast that with the acceleration of new ship delivery, global shipping capacity will be boosted, and sea freight is expected to decline in the future.

    Shipping costs are expected to decline

    Cma CGM wrote in the report that previously, due to the Red Sea storm forced many ships to be diverted, while freight demand was better than expected, resulting in a strain in global shipping capacity. But that may not be the case for long.

    "The situation in the Red Sea absorbed almost all of the new capacity that was put on the market in the first quarter," Chief Financial Officer Ramon Fernandez said on a conference call.

    He predicted that upward pressure on freight rates due to regional conflicts and strong consumer demand "will decline in the second half of the year."

    In January this year, as the situation in the Red Sea region increased risk, global shipping prices soared. Many ships traveling between Asia and Europe were forced to bypass the Cape of Good Hope, resulting in increased shipping routes and reduced capacity.

    After the Red Sea crisis broke out, freight rates rose on many routes

However, capacity is gradually increasing as new ships procured by major shipping companies come into service.

    Mr Fernandes expects the global fleet to grow by 10 per cent this year and about 7 per cent in the future, "which will lead to overcapacity in the seaborne cargo industry". "The detour to the Cape of Good Hope will not be enough to absorb the excess capacity."

    Shipping capacity is expected to increase

    Cma CGM Marine reported a first-quarter profit of $785 million, down from $2.01 billion in the same period last year.

    Under the impact of the COVID-19 pandemic, the global shipping industry is booming in 2021 and 2022. At that time, freight prices soared and shipping companies made record profits.

    With this windfall, CMA CGM and other shipping giants have increased their orders for ships in the past two years, and these ships are now in service.

    In addition to CMA CGM, Maersk, the world's second largest container shipping line, also recently forecast that global overcapacity will prevail in the second half of this year, which means that freight rates will fall.