Ocean Shippers Point Out Sign That the Global Economy Is in Dire Straits ~ Oct. 5, 2022

____________________________________________________________________________________________________

Ocean logistics companies are reportedly canceling orders amid declines in worldwide consumer demand in what could portend a gloomy economic outlook. The warning was noted in a Monday report by CNBC.

As global industrial leaders struggle with inflationsupply chain crises and fallout from Russia’s invasion of Ukraine, logistics managers told CNBC that they project a 20% decline in ocean freight orders. The sharp decrease in orders anticipates reductions in consumer demand and a decline in discretionary spending.

According to the report by CNBC, falling demand in staple products has had a cascading effect on many industries. A June forecast by World Bank noted that global economic growth projections anticipated a decline from 5.7% last year to 2.9% this year. Many experts report the June projections are overly optimistic.

World Bank President David Malpass said: “The war in Ukraine, lockdowns in China, supply-chain disruptions, and the risk of stagflation are hammering growth. For many countries, recession will be hard to avoid.”

Malpass expressed concern about the domino effect a decline in consumer demand will have, warning, “Markets look forward, so it is urgent to encourage production and avoid trade restrictions.”

TRENDING TODAY

Ex-Trump Staffer Admits She ‘Worked Together’ With NYT Reporter Maggie Haberman During White House Years

Major Scientific Publisher Retracts More Than 500 Papers

DHL Ocean Freight told CNBC that the reduction in shipping corresponds to the decrease in consumer demand for goods. HSL Logistics said in a note to clients that it plans to reduce shipping by nearly 50%.

The Daily Wire reported shipping vessel congestion in ports on the east coast of the United States. The situation was made worse by Hurricane Ian’s arrival last week and the Biden administration’s ongoing problems with truckers, port operators and rail lines. 

Central banks across the globe seem to be adding to the problem by lowering target interest rates — a move that may sound positive but often leads to lower economic activity and a higher cost to borrow money.

Inflation is now a global problem. The Daily Wire notes that according to data from the Organization for Economic Cooperation and Development, among G20 economies, inflation stood at 9.2% at the end of August (when comparing prices in August 2021 to prices in August 2022).

During the pandemic, Federal Reserve policymakers established a near-zero interest rate to stimulate the economy. This leaves the Fed with no maneuvering room to further prop up America’s ailing economy.

The Federal Reserve Bank of the United States raised the target federal funds rate by 0.75% last month. This followed similar increases in June and July and trigged a 500-point drop in the Dow Jones Industrial Average.

In a related piece of gloomy financial news, fears were evident on Wall Street on Monday as rumors about the possible insolvency of Swiss investment bank Credit Suisse began to circulate, according to The Daily Wire.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.