Cargo Traffic At LA Port Plummets; Trucking Firm Warns Of 2008-Style Slowdown• Zero Hedge
The inventory glut, i.e., the reverse bullwhip effect, is on full display at the nation's largest containerized port as cargo volumes slump during what is supposed to be the busiest shipping period of the season. There are also reports the trucking industry could suffer the worst decline since 2008 in the first quarter of 2023.
Let's start by highlighting the inventory glut that we predicted in May has collapsed trans-Pacific shipping container rates as US imports of goods from Asia lose steam. Retailers are canceling overseas orders, forcing freight companies to reduce sails. A lot of this has to do with importers ordering too many items popular during the pandemic, such as televisions, computers, fancy exercise bikes, and other electronics, while consumers abruptly changed their spending habits to services, such as restaurants, earlier this year, leaving retailers with a record amount of inventory.
Gene Seroka, executive director at the Port of Los Angeles, told Bloomberg that cargo volumes declined for a second month in September. He said the outlook for the remainder of the year will be "soft."