CEO INSIGHTS – Week Ending 2 February 2024

Logistics Industry

“In 2024, the small package market in the U.S., excluding Amazon, is expected to grow by less than 1%” Carol Tome, CEO, United Parcel Service {UPS}

“It’s been trending downwards [Air Freight]. They were upwards of $15 to $20 a kilo depending on the market but broadly speaking, now they’re back around the $5 a kilo market roughly. In the period from December 2022 to December 2023, capacity increased by 10 per cent and demand increased by 5 per cent. Demand certainly has come back, but it’s more in line with the softer global economy.” Andrew Coldrey, Vice President APAC, CH Robinson

Artificial Intelligence

“A growing body of evidence makes clear the role AI will play in transforming work. Our own research, as well as external studies, show as much as 70% improvement in productivity, using generative AI for specific work tasks” Satya Nadella, CEO, Microsoft

Consumer Demand

“First, the labour market remains strong with low unemployment and rising wages. These remain key drivers of consumer spending. Some risks we're monitoring include credit availability and delinquency rates. Second, while inflation continues to moderate, prices of many goods and services remain elevated” Michael Miebach, CEO, Mastercard

"Consumer spend across all segments from low to high spend has remained relatively stable. Our data does not indicate any meaningful behaviour change across consumer segments" Chris Suh, CFO, Visa

“But we did see a softening of US traffic. Specifically, our occasional US customers, who tend to visit in the afternoon, came in less frequently” Laxman Narasimhan, CEO, Starbucks

Domestic Economy & Taxation System

“The current tax system is no longer internationally competitive and not set up to address opportunities and challenges including the digital economy, decarbonisation, an ageing population and growing healthcare system.”  Rob Scott, CEO, Wesfarmers

Electric Vehicles

"The Chinese car companies are the most competitive car companies in the world. So, I think they will have significant success outside of China depending on what kind of tariffs or trade barriers are established. Frankly, I think if there are not trade barriers established, they will pretty much demolish most other companies in the world. So, they're extremely good" Elon Musk, CEO, Tesla

"We will build to demand, and we are encouraged that many third-party forecasts have U.S. EV deliveries rising from about 7% of the industry in '23 to at least 10% in 2024, which would mean another year of record EV sales” Mary Barra, CEO, General Motors‍

Inflation

“There are remaining cost headwinds the entire industry is facing in 2024” Shane Tackett, CFO, Alaska Air Group

Insurance

“We have continued to see inflationary pressures from drivers such as supply chain capacity constraints and higher third-party settlements in motor, and water damage and large fires in our home portfolio. We continue to closely manage insurance pricing to respond in line with input costs such as reinsurance and inflation on repairing homes and cars” Steve Johnston, CEO, Suncorp

Green Energy

“The challenge with hydrogen, which governments around the world are realising, is that it is going to be more complicated and more expensive than traditional fuels,” Meg O’Neill, CEO, Woodside Energy

Payments Industry

"We have updated our sizing of the new flows opportunity using the latest market data available. Excluding Russia and China, we see $200 trillion of opportunity annually across B2B, B2C, P2P, and G2C, certainly an enormous number." Ryan McInerney, CEO, Visa

Commercial Property

“The increase in office supply during 2021 and 2022, far surpassing the historical norm, and continued business moves towards high-grade offices explains the results we are seeing. There is a clear divergence between older, low-quality stock and the new premium office buildings rejuvenating our cities.” Mike Zorbas, CEO, Property Council of Australia