Global Shipping Update: China Is About To Wreck Your Summer
By Mike ‘Mish’ Shedlock
Let’s review shipping updates from Craig Fuller, Founder/CEO of FreightWaves and American Shipper.
Shanghai image from a Tweet embedded below
Vessels Waiting to Enter Port of Shanghai
This is how many vessels are waiting to enter the port of Shanghai. Raising interest rates will not solve this problem (just saying) pic.twitter.com/HfOx6VlyV8
— Michael Nicoletos (@mnicoletos) April 22, 2022
Video Images of Shanghai
There’s a video on every single WeChat Moments right now, being censored as quickly as someone can repost. Scrolling down every feed is just this video being reuploaded and then censored. It depicts desperate people calling into CDC asking for help during the Shanghai outbreak. pic.twitter.com/Y3W05VIaTn
— Dan (@DRechts) April 22, 2022
Shanghai Covid Lockdown
1/ THREAD: The extended Shanghai lockdown is morphing into a logistics disaster as trucks trickle into the city, leaving empty containers piling up at the world’s largest port. What’s happening with cargo there: w/ @yoyominnie @Kubota_Yoko @wsj_douglasj https://t.co/qn0UCWSdSa
— Liza Lin (@lizalinwsj) April 22, 2022
China About to Wreck Your Summer
The Chinese Communist Party is about to wreck your summer. https://t.co/AaKfaS710J
— Craig Fuller 🛩🚛🇺🇦 (@FreightAlley) April 23, 2022
“The coming volume drop in ocean container volumes (TEUs) leaving China for US ports is staggering. Our Ocean TEU Volume Index in SONAR now has a 14-day forward look at volumes, and it looks ugly. By early May 2022, we could see the lowest levels we’ve seen since May of 2020.“
There will be a surge of containers from China when it resumes its economy, but no one knows when this will happen, how long it will take, and how backed up their domestic supply chains are. For now, we know the freight market is slowing and 🇨🇳 is only making things worse. 1/
— Craig Fuller 🛩🚛🇺🇦 (@FreightAlley) April 17, 2022
Deflation Anyone?
7% drop this week in trucking shipping rates. #deflation https://t.co/XMBo5lK9kr
— Craig Fuller 🛩🚛🇺🇦 (@FreightAlley) April 22, 2022
What About Kitchen Appliances?
A large private consumer kitchenware manufacturer told me that they have seen a large contraction in demand over the past 8 weeks.
— Craig Fuller 🛩🚛🇺🇦 (@FreightAlley) April 22, 2022
Question of the Day
Its hard to say – it could allow inventories to burn off, but the biggest question is what those inventories consist of and how long will Chinese manufacturing be shut down. Too many questions at this point.
— Craig Fuller 🛩🚛🇺🇦 (@FreightAlley) April 23, 2022
Is the slowdown in Shanghai at all welcome? That’s the big question.
To the extent US merchants have ordered too much inventory in the face of falling demand, perhaps.
But Fuller notes there are just too many questions. For starters, what is China doing? Every other country on the planet is loosening restrictions.
What’s really going on?
What About the UK?
🇬🇧 Retail sales fall 1.4% as rising inflation takes its toll on spending https://t.co/CqKTpc6vaA
— Neil Saunders (@NeilRetail) April 23, 2022
Meanwhile, Back in the States
Truckload contract load volumes dropped 4.5% this week. 7th consecutive week of declining contract truckload volumes. Next week is EOM, hoping for an uptick. pic.twitter.com/o7ZoThkCIZ
— Craig Fuller 🛩🚛🇺🇦 (@FreightAlley) April 23, 2022
More Deflation Calls
These Bank of America Weekly Shipper Survey charts are nasty for carriers but suggest #deflation is on the way. pic.twitter.com/WfWyXWvlwS
— Craig Fuller 🛩🚛🇺🇦 (@FreightAlley) April 23, 2022
Recession Level Trucking Demand
Bank of America’s Weekly Shipper Survey “near freight recession level” pic.twitter.com/wUCX0rHFcF
— Craig Fuller 🛩🚛🇺🇦 (@FreightAlley) April 23, 2022
Important Point
I believe you get the idea, shipping is a mess and there is a slowdown as well. A US housing bust is underway.
Existing Home Sales Decline Again, But the Big Bust Starts Next Month
But here’s an important point about deflation and recession: When Fuller makes a recession or deflation call, it is specifically about the trucking industry, not an overall assessment.
He made that point clear in my video interview of Fuller that I posted on April 14.
See MishTalk TV with the CEO of FreightWaves: Trucking Recession or the Real Deal? for the video and discussion points.
Whereas he comments on the trucking industry, I am willing to go further. A very hard landing is on the way.
Thanks again to Craig Fuller for the interview and all of his Tweets.
For my stock market update, please see Expect More Stock Market Pain Because It’s Coming
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(TLB) published this article by Mike Shedlock via MishTalk.com with our appreciation for this perspective
Header featured image (edited) credit: China port/Image VCG
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