French shipping giant CMA CGM SA, owned by the billionaire Rodolphe Saade and family, said November 25 that weakening demand for freight transport and gloomier economic prospects are hurting profitability in Q4 2022.  

The warning from the world’s third-largest container line is bleaker than in September, when the closely held company signaled the start of a slowdown. It’s in line with European rivals A.P. Moller-Maersk A/S and Hapag-Lloyd AG, which have given similar guidance in recent weeks.

“The group expects energy costs to remain high, weighing directly on its operating expenses and, more generally, on consumer spending, particularly in Europe,” CMA CGM said in an earnings statement November 25. “This inflationary environment, combined with monetary policies, is clouding the outlook for economic growth.”

During the last three months of 2022, freight rates will fall to “more normal levels” and profit margins will decline, it said.

The emerging slump comes after an unprecedented boom in the shipping industry that left European transport billionaires like the Saades, Gianluigi Aponte and Klaus-Michael Kuehne, with cash piles they are plowing into assets including airlines.

The receding pandemic-fueled surge in freight rates and supply chain bottlenecks were still reflected in CMA CGM’s third-quarter earnings.

Net profit surged 25% to $7.04 billion during the period, lifting results for the first nine months of the year to almost $22 billion, a record that surpasses the $17.9 billion recorded for the whole of 2021.

Net debt was reduced to just $78 million at the end of September from $5.3 billion three months earlier, according to the statement.

CMA CGM isn’t alone in adopting a pessimistic tone going forward. The head of Maersk, the world’s No. 2 container carrier, earlier in November said Europe is close to entering a recession and the U.S. economy may not be far behind, while also warning freight rates had come down faster than expected. Hapag-Lloyd also signaled tougher times were coming.

The downturn could help get CMA CGM out of political hot water in France, where some lawmakers have called for a windfall tax on the company due to its high profits. Rodolphe Saade, the second-generation head of CMA CGM, has so far ducked the move even as special levies are in the cards for energy suppliers.

With a private fleet of some 584 vessels, the Saade family is worth $15.8 billion, according to the Bloomberg Billionaires Index.