Consumer spending in the US has been shifting back from goods to discretionary services, and demand for goods has fallen from the breath-taking stimulus-miracle spike in March and April 2021, as spending on services has surged, reports Wolf Street.
Spike in waiting times
In Europe, as similar trend is beginning to evolve, this trend back to services has started to show up in the world of container shipping.
Average waiting times for container ships at Shanghai, after having spiked to nearly 70 hours in April (14-day moving average), amid the lockdowns that snarled port operations in Shanghai, have now declined to 31 hours, according to VesselsValue.
This is still the longest wait time in the data for this time of the year, about 4 hours longer than the top of the range for the same period in 2019 through 2021, but it’s a huge improvement from April and from the spikes in 2021 when average waiting hours for container ships reached nearly 80 hours in August 2021.
Decline in ocean freight rates
Ocean freight rates to ship containers have also declined globally from the spike that topped out in September 2021. The Drewry World Container Index has dropped by 26% from the September 2021 high of $10,377 per 40-ft container, to $7,625 as of the week ended June 2.
But this is still multiples higher than the old-normal container freight rates before the pandemic: In 2019, the Drewry World Container Index ranged from $1,200 to $1,900.
From Shanghai to Los Angeles, container freight rates fell by 30% from the peak of $12,424 in September 2021 to $8,704 in the week ended June 2. But they’re still over four times higher than they were just before the pandemic.
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Source: Wolf Street
