Sea-Intelligence, a leading container shipping analyst, is warning the record rates seen on the transpacific are unlikely to last much longer.
Rates from Asia to the US west and east coast have been in record territory for the last three months with carriers injecting significant capacity onto both tradelanes. However, the US is in recession.
“We do have an uneasy sense that the current cargo bonanza cannot be sustained,” the Danish consultancy warned in its latest weekly report, saying the numbers do not add up.
“It does not add up to a sustainable supply/demand equation to see 20+% growth rates in demand in a time of marked recession,” Sea-Intelligence pointed out.
The capacity growth now seen in the transpacific trade is much higher than anything seen since Sea-Intelligence started detailed measurements in 2012.
At the same time, all economists are pegging the US economy as being in a recession. As an example, the IMF’s latest outlook anticipates the US GDP to contract -4.3% in 2020.
“It is difficult to see a model whereby this is sustainable in the longer term,” Sea-Intelligence concluded in its editorial on the transpacific.