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Global dry cargo slump? Perhaps also beyond the U.S.

The Wall Street Journal recently published an article detailing the slowdown of U.S. port activity for the months of September and October.  These data indicate that during an otherwise typically busy time of the year, imports have declined at each of the three busiest seaports in the U.S.  Economists are insinuating this might indicate a larger global problem and is not limited to buildup in inventory but instead a more systemic global slowdown.  News from China and now from Japan correlate with this sentiment.  However, the U.S. market continues to show strength with consumer spending on the rise and an all time high in equities thanks to continued low interest rates.  

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Total shipping volume in TEUs

 

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Cargo vessel utilization 

Data from our own Dry Cargo Index corroborates this assessment.  For both of these months dry cargo levels on averaged showed a decline.  Additionally, the number of vessels showing they are actively underway have decreased as well indicating lower utilization overall.  However, for the first half of November dry cargo levels have leveled off and are trending slightly upwards.  These data are interesting since the GFC Dry Cargo Index monitors cargo shipping levels globally instead of concentrating on only U.S. shipping activity.  Furthermore, our index concentrates on the largest of the cargo shipping vessels indicating on a global scale dry cargo shipping globally is also seeing a pullback.  Although a slight decline can still be inferred for September and October, the WSJ article references imports in the U.S. are up %4 for the first 10 months this year compared to last.  It is still unclear if this trend will continue past the peak shipping season, however the GFC Cargo Index seems to correlate with the slowdown in U.S. imports.

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