The Effects of a Recession on Global Shipping
Whether or not we are in a textbook recession is debatable. Nevertheless, we are currently in a world of rising consumer prices, rising interest rates, and a global energy crisis. So, how does all this affect the world shipping market? That is what we will talk about today in our blog: both the upward and downward pressures on the shipping market.
Downward Pressure on Global Shipping and Shipping Rates
There is no doubt that global shipping rates have been falling in 2022. Oil prices are dropping, but they were sky high in the spring with WTI at about $120 per barrel. Interest rates have been climbing, and these are all indicators that hurt the global shipping market. In addition, as consumer prices rise, that should have the effect of consumers buying less. The war in Ukraine also continues to hurt the world oil and gas markets.
At the same time, ecommerce continues to grow. Possibly as a result of the COVID-19 pandemic, more and more individuals shop online, and most of that shopping is done with a smartphone. This increases the need for shipping because customers need products available in order to buy them. And the waits for docking at different ports is decreasing. Supply chain problems continue, and there are long waits for new vehicles. Traveling is still well below 2019 levels, but it is definitely increasing.
So, despite what feels to many like a recession, global shipping remains strong and important in the world economy. No one has a crystal ball, so we will have to wait and see what happens in 2023. It is hard to know right now whether we will continue into a true recession or if the economy will start showing improvement. Several experts predict interest rates to fall in the next year or two.
In spite of everything, truck transport space is tight right now in the Vancouver area, but we have long and established relationships in place and can help you find the space you need for shipping. If you need some moving your products, please contact Overseas Container Logistics in Vancouver at (604) 295-8236, and let us help you find the best solution for your shipping needs.
Overseas Container Logistics (OCL) is a 3PL commercial freight-forwarding company based in Richmond, British Columbia.
If you have any questions about this article or would like to talk to us about your transportation and freight needs, give us a call at (604) 295-8236.