The 'freight recession' rocks global shipping, fueling a 75% plunge in container rates
The US economy may have dodged a recession so far, but some of its sectors have been hit hard by instabilities created by the pandemic.Since global shipping peaked during the coronavirus pandemic, the industry responsible for transporting goods across the globe has faced a protracted slump. And that's dealt blow to other segments of the transportation business, such as trucking - especially in the US - prompting the Federal Reserve to acknowledge the so-called"freight recession".
"There is a freight recession, and all of us who are exposed to the freight market face the same headwind," Aaron P. Graft, CEO of Dallas-based financial-services firm Triumph Financial, said on the company's second-quarter earnings call earlier this month. "Trucking firms reported a sharp decline in freight volume this period with excess capacity in the system. Respondents indicated that there was a freight recession, and it was more difficult to find loads. Weakness in demand was primarily in consumer and industrial segments," the central bank said.
Cardboard box sales have reached lows not seen since the Great Recession – with Packaging Corp. of America, the No. 3 containerboard company in the US, reporting their biggest six-month decline since early 2009.
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