Economic winter warning: Cargo volume at America's largest container port has plunged for the second month in a row

Freight data is often seen as a barometer of economic health. Freight data generally precedes the economy, and freight downturns tend to precede economic downturns. Consumer demand is slipping as inflation continues to push up retail prices. Shipping costs have worsened as carriers, fearful of a recession, have reduced capacity. Growth in American imports has lost steam.

Retailers with excess inventory canceled overseas orders, and shipments fell in what should have been a busy shipping month.

Weak industry outlook

Gene Seroka, executive director of the Port of Los Angeles, said the outlook for the rest of the year would be "soft." Its cargo volumes plunged in September, falling for the second month in a row.

Seroka said the port transported 709,873 20-foot equivalent containers in September, down 22 percent from the same month last year, and the month's cargo volume was the lowest in seven years. He also noted that volume so far is down 4% from last year's record levels.

Inbound containers at the Port of Los Angeles and the neighboring port of Long Beach fell 26.6% last month from a year earlier to 343,462 containers, the lowest inbound volume for the month since 2009.

Seroka blamed the slowdown on record high inflation, high fuel costs, high interest rates and other uncertainties that have made Americans cautious about discretionary spending.

Retail sales were poor in September

Retail sales rose zero in September from a month earlier due to higher inflation. Markets had expected a 0.2 percent rise. On a year-on-year basis, retail sales rose 8.2 per cent in September from a year earlier.

Flat month-on-month retail sales mean real consumer spending in all sectors is falling back.
Trucking, which is related to port freight, has also been affected by the economic slowdown and could fall sharply in the first quarter of next year.
Craig Fuller, chief executive of FreightWaves, a provider of data and analytics for the North American freight market, warned that the economic slowdown was spreading to the trucking industry, which has seen its worst downturn since the 2008 global financial crisis.

"The first quarter of 2023 could be the worst quarter for the trucking industry since 2008.

Source:www.weiyun001.com