A recent news article published in the WSJ states that shipping Stocks Will Sink as U.S. Consumers, China Lose Ballast.
Mountains of goods moved
Container shipping industry has started to slow amid U.S. inflation, Shanghai’s Covid-19 lockdown.
Every day, millions of sailors, truck drivers, longshoremen, warehouse workers and delivery drivers keep mountains of goods moving into stores and homes to meet consumers’ increasing expectations of convenience.
But this complex movement of goods underpinning the global economy is far more vulnerable than many imagined.
Container shipping rates have started sinking. This might only be the beginning of their descent.
A steady fall in World Container Index
A steady fall in the World Container Index compiled by London-based Drewry Shipping Consultants is the latest hint that Americans—and developed world consumers more generally—might be starting to spend less on goods as fiscal stimulus drains away, inflation at a four decade high eats into wage gains, reopening economies shift back toward services and the Fed initiates aggressive rate increases.
Another factor might be the lockdown in Shanghai, which appears to be disrupting the flow of goods out of China—meaning less need for container shipping.
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Source: WSJ
