One way to predict whether the economy is headed up or down is to watch shipping, which reflects the overall level of business. Within the past week I have seen two different indicators the economy is most likely headed down.
The first I saw was a CNBC story about surplus shipping containers, the big steel boxes that get filled with product and stacked on ships that transport them from third world manufacturers to first world retail chains. The empty containers are piling up in storage as they are unneeded. Similarly, with the ships that carry them.
Blank or canceled sailings are also on the rise in what is usually the opposite, as the year’s biggest spending period approaches. A blank sailing happens when a shipping company decides to skip a port or an entire leg of its schedule to manage changes in demand and capacity.
Last week, major shipping group Maersk warned in its third-quarter results that freight rates have peaked amid easing supply chain congestion and falling demand. The company told investors to expect lower ocean shipping profits.
The second, by Salena Zito for Townhall, described a downturn in trucking.
Two months ago, 30,000 truckers at Yellow lost their jobs when one of the nation's oldest and largest trucking companies filed for Chapter 11 bankruptcy protection. Last week, Convoy, the digital freight broker that was supposed to reinvent the wheel and disrupt the trucking industry in a positive way, also abruptly shuttered its doors.
"In my opinion, this industry is heading in the wrong direction, and when trucking and supply chain freight is heading in the wrong direction, so is the country. I am just not sure that people understand there is a problem," said Rick McQuaide, who runs a freight company in Cambria County, Pennsylvania, as well as in Florida.
These could signal a recession on the horizon, retailers placing fewer orders means less product shipped. Spending is up, because inflated prices are up, but item demand is evidently softening.