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COPENHAGEN, Oct 26 (Reuters) – Chaotic conditions in the freight sector and sky-high prices for transporting goods will persist for “a very very long time”, the world’s third-largest freight forwarder DSV said on Tuesday.
Major trade bottlenecks have formed around the globe due to a surge in demand for retail goods from people stuck at home under pandemic-related lockdowns, and these have worsened as economies recover.
This has led to record-high freight rates and the situation has worsened in recent months for both air and sea freight, Danish-based DSV said in its third-quarter earnings report.
“I have stopped using the word ‘normalization’,” Chief Executive Jens Bjorn Andersen told Reuters. “If normalization means that we will come back to a market like we knew it in ’18 and ’19 I do not think it will happen – at least not for a very very long time.”
The situation has been particularly severe in major markets such as the United States, where dozens of vessels remain stuck off the West Coast ports of Los Angeles and Long Beach, unable to discharge.
“The fact that investments in infrastructure has been neglected in the U.S. for many years does not help as the port and railway infrastructure simply is not equivalent to the volume increase that has taken place,” Andersen said.
He spoke after DSV confirmed strong preliminary third-quarter profit released earlier this month, when it also lifted its 2021 outlook for the fifth time this year on the back of record-high freight rates.
($1=6.3922 Danish crowns) (Reporting by Stine Jacobsen; Editing by Clarence Fernandez and David Holmes)