Container shipping is facing a weaker 2026 amid likely lackluster demand, overcapacity and a possible shift of mainline carriers back to the Red Sea and Suez Canal, a top CMA CGM executive said Friday.

“We see uncertainty for the coming quarters,” Ramon Fernandez, CMA CGM Group’s chief financial officer, said during an online briefing. “We anticipate a slowdown in global trade and freight rates may continue to normalize.”

His remarks coincided with the carrier’s third-quarter financial results, which saw year-over-year declines.

While CMA CGM’s shipping division saw a year-over-year decline in the quarter, Fernandez said it was an improvement compared with the second quarter, which was affected by the US-China trade and tariff spat.

Fernandez said the carrier’s fourth quarter will not be as strong as the third quarter, even though freight rates have rebounded since China’s Golden Week holidays in early October.

Despite concerns about overcapacity, Fernandez said CMA CGM needs new ships to maintain trade growth while investing in dual-fuel vessels to cut emissions. “There is no alternative,” he said. “We need to replace older vessels.”

He did not immediately comment on reports that the world’s third-largest carrier signed a deal this week for up to 10 22,000-TEU liquefied natural gas (LNG) dual-fuel ships with China’s Dalian Shipbuilding Industry Co., even though the shipyard confirmed the order. But he said CMA CGM would operate more than 200 dual-fuel ships by 2029, including 160 owned vessels.

French Navy escorting CMA CGM ships in Red Sea

On Red Sea transits, Fernandez confirmed the French Navy is escorting Marseille-based CMA CGM’s ships as part of the security conditions necessary for transiting the Red Sea and Suez Canal while avoiding attacks from Houthi militants operating from Yemen.

CMA CGM cautiously dipped its propeller back into Red Sea transits earlier this month when the 17,859-TEU CMA CGM Benjamin Franklin became the first ultra‑large container ship to pass through the Red Sea in nearly two years. Sister ship CMA CGM Zheng He is currently transiting the Suez and Red Sea region. Both ships are operating eastbound legs of the carrier’s French Asia Line 1 service, also known as the Ocean Alliance’s NEU4 service.

“If the [security] situation gets better, then we will adapt to this environment,” Fernandez said.

He would not comment on how the carrier’s partners in the Ocean Alliance, who comprise Cosco Shipping, OOCL and Evergreen Marine, view the possibility of Red Sea transits, only saying: “They make their own choices.”

A significant shift of vessels back to transiting the Suez Canal and Red Sea would result in a surge of capacity, depressing freight rates on East-West trades as carriers switched back from longer voyages around southern Africa. Container ship diversions away from the Red Sea began in late 2023 following the first Houthi attacks soon after the start of the Israel-Hamas war, soaking up between 8% and 12% of global tonnage — depending on varying estimates from analysts and carriers — due to the longer transits.

Peter Sand, chief analyst at online benchmarking platform Xeneta, said global freight rates are already forecast to fall by up to 25% next year even without a return to Red Sea transits.

Speculation that carriers will return to the shorter Suez Canal route has increased since Houthi rebels in Yemen announced a ceasefire on shipping last week, but risks remain.

Terminal deals

Fernandez, meanwhile, told the briefing that CMA CGM would continue to develop its terminal and logistics businesses. On Thursday, the carrier confirmed the signing of a term sheet to take a 20% stake in Eurogate Container Terminal Hamburg (CTH), a deal it expected to complete in the first half of next year. CTH has a current capacity of 4 million TEUs, but a planned expansion project will add 3,500 feet of quay wall and 94 acres of yard space to increase capacity to 6 million TEUs.

CMA CGM will also acquire Freightliner UK Intermodal Logistics, one of Britain’s rail operators, in a transaction expected to be finalized in early 2026 subject to regulatory approvals. CEVA Logistics has also completed the acquisition of Borusan Lojistik, a major logistics player in Turkey.

Fernandez’s comments came after the shipping, logistics, air cargo and media group reported Friday a 73% drop in third-quarter net income to $749 million, down from $2.7 billion in the prior year. Revenue fell 11% to $14 billion.

Shipping saw a 17% drop in third-quarter revenue to $9 billion against $10.8 billion a year earlier. Earnings before interest, tax, depreciation and amortization (EBITDA) fell 49% to $2.2 billion from the third quarter of 2024.

Liftings rose 2.3% to 6.2 million TEUs year over year as CMA CGM focused on the “development of its inter-regional and south-south trades,” Fernandez said, without giving further details.

Third-quarter revenue from the logistics division slipped 5% to $4.8 billion, while EBITDA fell 7% to $459 million.