07 Dec Baltic Rates Update
September data indicates continued strength among US consumers as retail spending increased .07% compared to August. However, there also are signs of an upcoming slowdown such as reduced spending among lower-income consumers, falling personal savings and a rise in debt delinquencies.
In addition, demand continues to ease but transpacific rates may be levelling off at a new floor as carriers work to reduce capacity, reflected in decreased ocean rates across the following routes: Asia-US West Coast, Asia-US East Coast and Asia-Mediterranean.
Whilst some analysts are speculating that Q4 will see increased traffic and growth across major trade routes, rates are likely to be much lower than last year due to ongoing overcapacity.
At an industry-level the issue of overcapacity is forecast to continue at least through to 2024 as capacity continues to outstrip supply, which means carriers will face the continued challenge of aligning supply with demand, downward pressure on rates and possible losses next year and beyond.
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