Ocean shipping orders are signaling a big drop in consumer demand

A important user pullback is showing up successful water shipping, with logistics managers telling CNBC they person seen a 20% driblet successful water freight orders for the months of September and October. The diminution successful request cuts crossed galore products, including machinery, housing, concern and immoderate apparel. Logistics CEOs explicate to CNBC the crushed is simply a operation of excessively overmuch inventory coupled with a deficiency of clarity connected user demand.

The water shipping inclination echoes caller comments from logistics manufacture executives. Georgia Port Authority enforcement manager Griff Lynch said helium expects the fig of waiting ships to driblet implicit the adjacent respective weeks aft seeing historical vas calls.

In apparel and footwear, executives accidental determination is nary definitive trend, though inventory issues are becoming much prevalent. Nike's overstock problems announced past week successful its net weighed connected the stock.

"Inventory levels are precocious arsenic consumerism shifts further to off-price," said Brett Rose, CEO of United National Consumer Suppliers. "Bigger brands are precise conscious of existent play and trends. A Bloomingdale's user doesn't privation past season's shoes oregon handbags. These items volition beryllium charismatic to consumers of retailers similar T.J. Maxx, Marshalls, Ross Stores," helium said.

Seko Logistics tells CNBC that orders for costly items similar astute parcel lockers, integrated server racks, ultrasound machines, and time-sensitive cargo similar retail displays are inactive strong.

DHL Ocean Freight tells CNBC it is not presently seeing immoderate denotation of a 20% driblet disconnected successful orders. But with nary unreserved anticipated successful the physique up to the Chinese nationalist vacation of Golden Week, it expects request to beryllium level successful October. The ongoing menace of labour enactment among obstruction and larboard workers successful immoderate geographies, larboard congestion successful Europe, and weather-related docket disruptions volition apt pb to much canceled sailings and larboard omissions, partially offsetting immoderate of the complaint decreases retired of Asia Pacific.

To enactment a level connected prices, water carriers are doing what's called tactical canceled sailings truthful they tin lucifer the vas abstraction with orders, which they anticipation volition halt the diminution successful prices. In a enactment to clients, HSL Logistics said its vas cuts were by astir 50% and that the pullback successful vas capableness whitethorn proceed into 2023 until demands prime up earlier Chinese New Year, which is successful precocious January.

It volition instrumentality clip for the chopped successful capableness to halt the freight complaint slide. According to Freightos, Asia-US West Coast prices (FBX01 Daily) fell 8% to $2,978/Forty Equivalent Units (FEU). That complaint is 82% little than the aforesaid clip past year. Freight prices for the Asia-US East Coast way (FBX03 Daily) decreased 5% to $6,952/FEU, and are 63% little than the rates for this week past year.

Other information points which awesome a alteration successful orders are the outbound tender rejections.  

The higher percent of rejections indicates tighter capacity; the little the percent shows looser capacity. "Right present we are tracking astatine 2019 levels and are down 80% from wherever we were a twelvemonth ago. Looking astatine spot rates excluding substance surcharges, we are presently 31% beneath wherever we were past year," said Kevin Hill, Head of Communities and Research for FreightWaves.

The CNBC Supply Chain Heat Map shows vessel congestion connected the East Coast continues and the interaction of Hurricane Ian volition hold the clearing retired of vas congestion, according to MarineTraffic.

During the play of September 12-18, the Port of Savannah reached the highest fig of play mean days waiting astatine anchor since April 2022, according to Alex Charvalias, proviso concatenation in-transit visibility pb astatine MarineTraffic. "Because of Hurricane Ian, zero vas calls person been recorded astatine the Port of Savannah since September 29. There is nary question this caller disruption by Ian volition summation the existing congestion adjacent more."