This is normally the busiest time of year for shipping. Businesses are typically stocking up for back-to-school and holiday sales. Instead Container-Ship Plunge Signals U.S. Slowdown
Plunging rates for chartering container vessels that carry sneakers, furniture and flat-screen TVs may signal a U.S. consumer slowdown and losses for shipping lines in what is traditionally their busiest time of the year.
Fees for hiring vessels have fallen 9.3 percent since the end of April, according to the Howe Robinson Container Index, which tracks charter rates for a range of vessels. Last year, the index surged 56 percent in the period, as lines added ships on demand from U.S. and European retailers restocking for the back-to-school and holiday shopping periods.
“The troubling part is that charter rates are falling in the peak season,” said Johnson Leung, head of regional transport at Jefferies Group Inc. in Hong Kong. “Sentiment among consumers and retailers isn’t very strong.”
Concerns about the sustainability of economic growth are also contributing to container lines renting ships for shorter periods. Average charter lengths have declined to seven months from 10 months at the beginning of the year, according to Alphaliner.
Shipping lines are also contending with fuel costs that have jumped 53 percent in a year in Singapore trading, alongside a rise in oil prices, and an expanding global fleet.
Harper Petersen Index
Here is a chart of the Harper Petersen Ship Broker Index
This is yet another indication of the global economic slowdown.
Mike “Mish” Shedlock
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