The state of the post COVID economy in 2022 is raising major concern as conditions include a huge level of product inventories, rising inflation, a potential impending recession, and a decline in consumer spending along with a giant supply chain bullwhip (see bullwhipeffect).  FreightWaves reported this week that “softness in container markets will have a big impact on trucking in July.” In addition, over the past two months, the average of container spot rates from China to the U.S. West Coast has dramatically dropped by 41%. (More at: FreightWaves, “A potential economic recession and the supply chain bullwhip ..” by Craig Fuller, 6/21/2022)

On Monday, the U.S. House of Representatives passed the Ocean Shipping Reform Act (OSRA) of 2022 by a large majority and is expected to receive Biden’s signature soon. When enacted, this legislation will update the Shipping Act of 1984 and amended in 1998. With accusations of unwarranted and even illegal fees, the Federal Maritime Commission (FMC) Chairman, Daniel Maffei explained that “These changes will have a beneficial effect on how U.S. shippers are served and will bring more accountability to how ocean cargo services are provided.” (More at: American Shipper, “Biden to sign ocean shipping reform bill … ” by John Gallagher, 6/13/2022)

As container import volume to the U.S. has sunk more than 36% since May 24th, reported by FreightWaves this week, the Drewry World Container Index spot rates from China/East Asia to the U.S. West Coast followed along with a major drop of 41% per FEU, and 36% East Coast. Analysts point to three contributing factors including, an inventory glut in the U.S., worsening inflation impact on consumers and the unrealized Shanghai container surge. These rates will be a welcome relief to Asia/U.S. freight but is also a sign of other issues looming in the future. (More at: FreightWaves, “US import demand is dropping off a cliff,” Henry Byers, 6/7/22)

Santa Fe Relocation has reported that their office in Kyiv has opened for work in May and that the city is “more or less safe at the moment, although there are several air raid alerts almost every day and night.” There is still a major shortage of staffing and all transportation via air and sea remains suspended. However, shipping to and from most European locations by land is available. (See more at Santa Fe Relocation news page, 05/19/2022)

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As the U.S. inflation rate reaches 8.3%, a near 40 year high, experts predict that the continued high price of diesel fuel increases the potential for a U.S. recession in 2023. FreightWaves reports this week that according to economists high prices for diesel will eventually translate to higher consumer prices as these costs are passed on to consumers by shippers and trucking companies. (See more at: FreightWaves, “The climbing price of diesel is raising the risk of a recession” by Noi Mahoney, May 17, 2022)

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The past three decades following the break-up of the Soviet Union (USSR) have been an amazing productive economic period for capitalism in modern times. During this time, China’s GDP dramatically grew over four fold just in the ten years following 2000, with “little regard for individual rights, environmental standards, or free markets.” (More at: FreightWaves, “Free trade is dead ….” By Craig Fuller, 5/16/22)

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