MSC, world’s biggest shipping company and U.S.-China trade bellwether, is betting on a rebound for the global economy

Mediterranean Shipping Company (MSC), the largest ocean freight line globally, is optimistic about the outlook for the rest of the year. CEO Soren Toft says that trade demand will signal positive signs for the global economy, but it will take a few months for a rebound to take hold. He anticipates that positive signals will emerge in the middle of this year, with a likely rebound in freight orders once inventories in North America and Europe taper down. The Swiss-based shipping firm, which has a 17.5% market share in container traffic, is viewed as a barometer for global trade.

Toft believes that the US is in good shape, with a strong job market and full employment, as well as being a net energy exporter. Meanwhile, signs of strength are emerging on the China to Europe trade route, which is an indicator of consumer demand. Following Chinese New Year, the company is seeing healthy volumes out of China to North Europe, and it is hoped that this trend will continue in the coming months. China’s latest manufacturing data has also shown a rebound from contraction to expansion.

According to FreightWaves data, global freight orders are slowly picking up post-Chinese New Year, which is normal due to pent-up demand for orders. During the holiday, ocean carriers reduced the number of sailings out of China, and some Chinese manufacturers opened in stages to avoid Covid-related closures. While inventories are still high in North America and Europe, driving down trade volumes, MSC is moderately optimistic that trade will resume, and positive signs will emerge in the middle of the year.