World will overcome challenges to keep trading: MSC CEO

At a time when the contraction of global economic growth, high energy prices and inflation are dominating the public agenda, a high-level meeting of CEOs and government officials in Paris in mid-December offered a few glimpses of optimism and underscored the continued importance of global trade.

"The future economy will still be globalised even if some supply chains are a little more distributed," Soren Toft, CEO, MSC said in a panel session on Charting a New Economy. "Trade has brought hundreds of millions out of poverty, enabled local producers to tap international markets and empowered local communities through economic prosperity."

Toft added how MSC "as the world's largest container shipping line has the size and scale to navigate this environment and keep on investing for the future to ensure that populations keep benefiting from international commerce."

Following the bust and boom volatility of the pandemic markets when consumers ploughed money into physical goods, the commercial shipping market has been normalising in the second half of this year compared with the extraordinary freight rates witnessed during the pandemic. "Nonetheless, container demand has shown a slight resurgence in recent weeks and countries will continue to trade, potentially still producing some modest growth in 2023," Soren said.

The cargo market is also experiencing variation across different regions with pessimistic forecasts in Europe being outstripped by a more positive view in North America following five consecutive months of slowing inflation in the U.S.

The conference panel agreed that production costs are high on the agenda of CEOs as energy costs and inflation impact all industries. "Companies are unlikely to make immediate fundamental changes to producing goods in Asia even if there have been some cases of reshoring and near-shoring in the supply chain," Soren said. Although Asia remains the world's manufacturing hub, within a couple of decades, Africa will in the future play a greater role in production for the world, he added.

Soren also outlined MSC's approach to sustainability and how MSC is contributing to efforts to decarbonize the industry, step by step. "For MSC, sustainability is a top priority and we are already preparing our fleet for the fuels of the future, always heading towards our net zero 2050 target."