CNBC’s Frank Holland joins ‘The Exchange’ to discuss the impact of rates on the freight industry, manufacturer’s concerns about tightening credit, and weakening consumer demand. For access to live and exclusive video from CNBC subscribe to CNBC PRO:
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BREAKING: Recession News
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The global freight industry is experiencing a downturn, and many industry experts are worrying about the impact of declining rates and demand. This fear of a freight recession is based on several factors that are putting pressure on the industry. In this article, we will discuss the factors at play and the potential impact on the industry.
One of the primary factors behind the decline in freight rates is the oversupply of shipping capacity. With many new ships being built and added to the global fleet, there is simply too much capacity available. This oversupply is driving down rates as companies compete for business. At the same time, demand for shipping services is weak, with global trade growth slowing down as tariffs and other trade barriers are erected.
Another factor affecting the industry is the ongoing trade war between the United States and China. The imposition of tariffs and counter-tariffs has disrupted trade flows and led to a reduction in demand for shipping services. This has hit many sectors hard, particularly the container shipping sector, which relies heavily on China and the United States for trade.
The decline in freight rates is also having an impact on shipping companies’ earnings. Shipping companies are seeing their profits shrink as they are forced to lower rates to remain competitive in the market. This puts pressure on their margins and makes it difficult to invest in new technology or expand their business.
The fear is that the freight recession could have a wider impact on the global economy. The freight industry is a key indicator of economic health, and if the industry is struggling, it could signal a broader economic slowdown. This could lead to reduced investment, lower consumer confidence, and a slowdown in economic growth.
There are some signs that the industry is already feeling the effects of the freight recession. Major shipping companies such as Maersk and Hapag-Lloyd have reported lower earnings, and there have been layoffs in some sectors. This suggests that the slowdown is already having an impact on the industry.
Overall, the freight recession is a cause for concern for the industry and the wider economy. The oversupply of shipping capacity, weak demand, and the ongoing trade war between the United States and China are all contributing factors. If the industry continues to struggle, it could have wider economic implications, and policymakers will need to take action to address the issue.
It's funny when big trucking comapnies that also have brokerages as jb hunt, arcbest, us express, schneider etc when their income drops because they are not brokering as much as they use to do(that's where most of their incomes come from) it's all over tv but nobody cares and reports on small trucking companies that don't have own direct shippers and depending on brokers who were taking advantage of low freight volume and been paying them crumbs, nobody cares that since begining of the year 9000 small trucking companies shut down. If fed want to reduce inflation they should look and limit those big brokerages how much they can charge shippers for freight transport it is outrages and unacceptable that brokers are allowed to keep 35-70% margin for freight transport and then shippers passing those high charges to consumers which is cause and is called inflation. Fed memebers need to step in immediately and stop this price gaugging that freight brokers doing, fed needs to limit brokers to be able charge only 10% amrgin and inflation will drop down imediatelly, plus you will save 10's of thousands businesses from closing down . We don't even need brokers all shippers should sign with "Lane Axis" and deal directly with carriers and that way save 50% on their freight transport cost.
1:51 whats up with that woman's hairline?
According to some experts, the United States and other regions of Europe may have a recession in 2023. Because China and emerging countries frequently grow faster than more developed economies, a global recession, which is defined as a decline in annual global per capita GDP, is more uncommon. Fundamentally, if economic growth lags behind population growth, the global economy is said to be in a recession.
Lack of broker transparency is killing the trucking industry
Get the popcorn out boys. It's going to get bloody
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thugs and gangsters don't know to make money
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The wisest thing that should be on everyone mind currently should be to invest in different streams of income that doesn't depend on the govt. Especially with the current economic crisis around the world. This is still a good time to invest in Gold, silver and digital currencies(BTC, ETH..).
Thanks for continues updates! I am super excited about how my investments is going so far, making over $13k every week is an amazing gain
It’s cyclical when it comes to freight. It will pick up at the end of Q3