It has been a couple of years since I last made comments for this edition, and my crystal ball never would have predicted the last couple of years of turmoil that has caused so much strain and distress for all shippers. Neither would I have thought that the political turmoil in the Ukraine would have occurred and had such a great impact. Of course, the COVID-19 pandemic was the biggest cause of disruption that has been dealt with in my lifetime, as the global affect was profound in all aspects of life.
Here we are trying to make sense of the recent past and look forward to what will come. We still have labor issues that are unsettled but as of now have not caused problems with cargo flow, thankfully. We are dealing with the impact of high shipping rates and energy costs in the form of inflation that touches everything we consume. As our government is using tools from 30 years ago to deal with this, the overall effect on the economy is proving to be negative. When I look at just our industry, the impact here is that volumes of cargo have dropped or are dropping precipitously. Base cost for carriers has not declined but rates to shippers are falling to what might be unsustainable levels. It is the full swing of the pendulum. Some of the drivers of the economy are stalled or collapsing under the pressure of quickly increasing interest rates. Purchasing power of the consumer is shrinking quickly, yet it seems the employment needs are still in demand.
What does this mean for 2023? I would suggest that the import needs will be in decline for a while as the ability of the consumer to buy freely will be more difficult, and as a result inventories will need to be reduced. Exports will slow even more as the strong dollar and high interest rates will affect the foreign buyer and cause them to look at places other than the US for the goods they need. Remember: everything we sell to the export market can be found somewhere else.
I would suggest that we all hang on — it may be a bumpy ride.