Shipping Industry's Big Woe Has Turned on Its Head

Before, a backlog. Now, a lack of demand
By Kate Seamons,  Newser Staff
Posted Oct 3, 2022 1:14 PM CDT
Shipping Industry's Big Woe Has Turned on Its Head
A crane moves shipping containers off a ship near Bayonne, N.J., Wednesday, Sept. 14, 2022.   (AP Photo/Seth Wenig)

For what seemed like a very long time, shipping-related news was one-note: The backlog was wild, shooting up prices and causing long delays. There was a months-long lag on furniture shipments, shipping containers skyrocketed in price, and America's busiest port shifted to 24/7 operations. Now, a new tune: As the Wall Street Journal reports, the start of peak season has coincided with a slew of canceled sailings.

Last October, companies like Walmart and Home Depot had resorted to chartering their own ships in an effort to avoid some of the shipping pain. One year later, Trans-Pacific shipping rates have cratered about 75% as retailers sit on an excess of inventory; logistics CEOs tell CNBC "a lack of clarity on consumer demand" is also a factor. Shipping giant Maersk zeroes in on the change in consumer behavior, telling Bloomberg that "spending patterns have both softened and shifted away from goods-heavy pandemic-era patterns and more towards the services and experiences unavailable during the COVID outbreaks."

The Journal looked at shipping data and found that for the two weeks beginning Oct. 3, some 61 sailings departing from Asia (about two-thirds to the West Coast and the remainder to the East Coast) were axed; that number is typically in the four to eight range. Costs have plummeted as well, from more than $19,000 to get a shipping container across the Pacific in 2021 to $3,900. And shipping capacity is only set to increase, with orders for new ships bound to increase capacity by 8.8% next year and an additional 9.7% in 2024. (Read more shipping stories.)

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