DP World third-quarter container volumes rise 2.1% on 'resilient' global trade

Global ports operator warns near-term outlook remains uncertain due to geopolitics, higher inflation and currency fluctuations

DP World handled 20.1 million TEUs of container volumes across its global portfolio of terminals in the third quarter of 2022.

Global ports giant DP World reported a 2.1 per cent increase in gross container volumes during the third quarter of 2022 as global trade flows remain “resilient” but warned the near-term outlook remains uncertain.

The Dubai-based ports operator handled 20.1 million twenty-foot equivalent units (TEUs) across its global portfolio of terminals in the three month period to the end of September, DP World said on Tuesday.

“We report another robust set of throughput figures … which is once again ahead of industry growth of 1.1 per cent,” said Sultan Ahmed Bin Sulayem, group chairman and chief executive of DP World, citing consultancy firm Drewry's estimates for the industry performance.

“As expected, growth rates have decelerated due to the more challenging market conditions, but global trade continues to remain resilient, and our portfolio is expected to continue to outperform the market.”

DP World's third quarter gross volume growth was mainly driven by Asia Pacific, Middle East and Africa, the Americas and Australia.

“Encouragingly, our flagship port of Jebel Ali continues to deliver robust volumes,” Mr Bin Sulayem said.

Jebel Ali port handled 3.5 million TEUs in the third quarter, a 2 per cent increase from the same period a year earlier. The Americas and Australia registered growth of 9.3 per cent year-on-year to 3.1 million TEUs, while Asia Pacific and India's volumes grew 4.1 per cent to 9.2 million TEUs.

Mounting global macroeconomic uncertainties as a result of the Russia-Ukraine war sent commodity prices to record highs earlier this year and exacerbated inflation pressures.

Russia is a major supplier of oil, gas and metals, and, together with Ukraine, of wheat and corn. A supply crunch of these commodities has already sharply driven up prices.

In October, the International Monetary Fund cut its global economic growth forecast for 2023 to 2.7 per cent — 0.2 percentage points lower than its July forecast — and warned of a cost-of-living crisis due to the impact of the Ukraine war, broadening inflation pressures and a slowdown in China.

A slowing economy in China, the world's second largest economy, will affect global trade and activity, according to the IMF.

Supply chain woes and congestion in container shipping are becoming “more entrenched” and are affecting the global exchange of goods, according to the Kiel Institute for the World Economy.

The World Trade Organisation has revised down its forecast for global trade growth this year to 3 per cent from 4.7 per cent due to the Russia-Ukraine war. Global trade growth in 2023 is expected to be 3.4 per cent.

In the first nine months of 2022, DP World handled 59.6 million TEUs, an increase of 2 per cent year-on-year on a reported basis and 2.5 per cent higher on a like-for-like basis.

“Looking ahead, the near-term outlook remains uncertain given the geopolitical environment, inflationary pressures and currency fluctuations but we remain positive on the medium to long term outlook for global trade,” Mr Bin Sulayem said.

“Overall, given the solid nine-month volume performance, we expect to deliver an improved set of full year results.”