US Container Imports Plunge As Recession Fears Mount
Amid the mounting speculation of a soft landing and even talk of a "no landing" (read: here and here), we've pointed out multiple strategists who don't share that sense of optimism but rather one that is typical of an end-cycle environment (read: here & here).
A new report by Canada-based logistics company Descartes Systems Group indicates that US shipping container imports plunged 20% in the first two months, according to Bloomberg.
In January and February of this year, the total volume of inbound containers, measured in 20-foot equivalent units, was 3.8 million, which marks a decrease from 4.78 million recorded during the same period in 2022. The latest reading is in line with 3.86 million in January-February of 2019.
Container rates worldwide for 40-foot boxes have returned to levels before the pandemic. This comes as global central banks aggressively hike interest rates in response to inflation, curbing consumer spending.
The financial burden of soaring inflation and increasing rates falls heavily on low-income consumers. Given that consumerism represents 68.5% of GDP, the troubling slowdown in container shipping suggests that the economy is showing signs of faltering.
Descartes said container volumes from China, Japan, and Germany slumped the most.
Container import declines into the world's largest economy is an ominous sign as some strategists believe a recession might unfold in the second half of the year. Also, rate increases from last year are only beginning to filter in and will strongly curb economic activity in the coming months.