Shipping giant CMA CGM announced on Thursday that robust international trade and disruptions in the Red Sea bolstered its main maritime division in the second quarter. This support should help mitigate any market slowdown later this year as new ship capacity comes online.

The world’s third-largest container shipping line reported a 6.8% year-on-year increase in volumes for the second quarter. Volumes also rose more than 6% from the first quarter, indicating an upturn in demand.

Chief Financial Officer Ramon Fernandez noted that restocking by U.S. firms continued in the April-June quarter, driven partly by concerns over geopolitical tensions with China and the risk of strike action by U.S. East Coast port workers.

However, Fernandez emphasized that CMA CGM’s strong volumes primarily reflect a solid overall economy.

“The pace of restocking, which is supporting demand, aligns with economic activity, so we are not worried about an abrupt reversal in the trend,” he said.

Volumes from China to the United States were up 10% so far this year, double the pace seen throughout 2023, Fernandez added.

CMA CGM anticipates the shipping market will stabilize later this year after a brisk first half and remain relatively balanced in 2025. Demand is expected to stay solid while the influx of new ships should moderate.

Rival container lines Maersk and Hapag-Lloyd have both raised their full-year profit outlooks recently due to strong demand. CMA CGM does not provide financial forecasts.

Vessel rerouting away from the Red Sea due to attacks by Yemen’s Houthi militants has absorbed excess fleet capacity, with CMA CGM sending most of its ships around southern Africa. This has caused congestion at transshipment hubs in Tangier, Morocco, and Algeciras, Spain, which have taken over as key points for Mediterranean destinations typically linked to Asia via the Suez Canal.

Fernandez noted that congestion in Asian ports, highlighted by Maersk last week, is starting to ease.

CMA CGM’s results have continued to decline from the record levels seen during the post-COVID shipping boom, which fueled its acquisitions in port terminals, logistics, and media.

Second-quarter net profit dropped to $661 million from $1.33 billion a year earlier.

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