Ocean Freight Orders Are Down 50% Year-Over-Year

A recent report from CNBC highlights some concerning factors in the current freight market. The decline in ocean freight orders, down a staggering 50% YoY, leaves rail and road transport feeling the burn. This downturn has even led JB Hunt’s president, Shelly Simpson, to label the current state of affairs a “freight recession.”

What’s going on with the numbers?

• East and West coast ports battle for trade volume supremacy, but the overall pie is shrinking. 
• Port of New York and New Jersey Q1 2023 TEUs: nearly 1.8 million, similar to 2019 levels.
• A freight slowdown has been in the data for months, with fewer trucks moving in and out of warehouses.
• Manufacturing orders are down by 40%.
• Ocean bookings worldwide for freight arriving at all US ports are down by about 50% from last year. 

Global Economic Squeeze and Consumer Shifts

Although China’s manufacturing got a boost after COVID, the overall trade data still spells trouble for the global economy. 

CIO of Bleakley Financial Group, Peter Boockvar, says people are spending less on goods and more on experiences like traveling, dining, and relaxation. That means less manufacturing and cargo to move. 

Takeaway on Freight Recession

Things aren’t looking too good. Trucking companies are under pressure as a capacity surplus increases the competitive landscape. Lower and lower rates abound, providing much social media fodder but, more importantly, struggling revenues. 

As the data shows, the decrease will continue for the trucking industry as the supply chain reaches land. As always, staying informed and the ability to quickly adapt to market changes are key to weathering these challenges.