Plus: updates on Trump’s trade policies, Panama Canal plans, energy initiatives, a major warehousing giant exceeds Q4 expectations, declining Asia-US shipping rates, and more.
"The container made shipping cheap, and by doing so changed the shape of the world economy." - Marc Levinson
In the latest episode of "The Freight Caviar Podcast", we sit down with Desmond Clark, President of Bear Down Logistics. He shares insights on maximizing productivity, and the importance of quality over quantity.
Sharp increase in freight rates early 2024 may signal an impending surge in goods inflation, according to data from Steno Research.
As we venture into 2024, a sharp spike in international container freight rates suggests an upcoming climb in U.S. goods inflation, potentially disrupting market forecasts. While a significant cutting cycle is anticipated, uncertainty over the inflation trajectory remains unreflected in current market pricing. Analyst Andreas Steno draws a direct line from current shipping costs to future price increases and questions the Fed's next steps.
Critical Observations:
Studies link shipping costs directly to inflation: a doubling in freight rates may boost CPI inflation by 0.7 points. The pandemic's freight cost surge, a 600% jump, eventually passed onto consumer prices, a pattern we may see again.
Not everyone agrees on this outlook. Debates on Twitter reflect a spectrum of opinions. While some urge the Fed to take quick action, others question the reliability of freight rates as an inflation indicator, especially in a market still stabilizing from recent shocks.
Just because there's short term correlation, it doesn't mean that historically this has been the case.
— George (@georgezii_) January 21, 2024
What's the R^2 between those two since 2013?
Spurious correlaction in my opinion. In 2021-2022 so many shocks tooked place at one time, that it is not right to connect inflation only to freight levels
— Paweł Mura, CFA (@Pawel_Mura) January 21, 2024
The conversation is buzzing with varied perspectives – some users see a strategic opportunity amid potential policy errors, while others doubt whether inflation will indeed follow suit. The uncertainty of the times adds to the complexity of predicting the Fed's response.
#policyerror
— Chris McAlister (@TheWineSwine) January 21, 2024
But, as you infer, need to determine what they will do, not what you think they will do in order to play checkers.
Chess players can use that policy error to their advantage so long as they don’t do it too early.
Source: Andreas Steno/X | Stenoresearch.com | CEPR.org
In a recent episode of the Stay In Your Lane Podcast from Triple T Transport, Allianz Trade North America Chief Economist Dan North shed light on why the anticipated economic recession hasn't yet materialized and its implications on the freight market.
The ISM Manufacturing Index moves from contraction to expansion for the first time in 16 months.
CEOs at Davos signal ongoing supply chain disruptions may persist, affecting global freight and consumer prices.
The impressive third-quarter surge in freight activity paralleled a 4.9% increase in U.S. real gross domestic product (GDP) during the same quarter.
Join over 12K+ subscribers to get the latest freight news and entertainment directly in your inbox for free. Subscribe & be sure to check your inbox to confirm (and your spam folder just in case).
