• The low, 0.9% growth rate into North America is based on a comparison with August 2020 when the boom was in full swing and hence, the data tells us the boom continues at the same pace. Therefore, there are also facts to support a narrative according to which the current improvements in the market are purely temporary, and once we get into the ramp-up leading up to the Chinese New Year, we could very well see congestion become even worse and spot rates set new records again. Two key elements to keep an eye on What should we keep an eye on in terms of an actual turning point in the market? Fundamentally, there are two elements that could resolve the situation. The first one is the gradual resolution of the bottlenecks. The extremely high freight rates still stem from a lack of capacity. The lack of capacity is due to the massive delays of vessels. The delays are due to port congestion. Port congestion is partly due to a delayed pick-up of cargo by importers. This, in turn, is partly due to shortages in the landside part of the logistics chain related to trucks, rail, warehouses, etc. Once we consistently begin to see the landside operations work smoothly, we should see dwell time in the terminals improve and queues outside the ports reduced. Furthermore, this should be a sustained improvement seen over at least a couple of months, as ripple effects through the networks might give the wrong impression of the underlying developments. The reality is that the timeline for resolving all the bottlenecks in this way is likely to be at least 6 months. Any new curveballs, such as shutdowns in Chinese ports or port strikes in major ports, will delay the process. As an example, there are port strikes in Italy this week. Rate levels are highly likely to drop before operations are fully back to normal, but this will not be an immediate effect. Another element that could rapidly speed up the process to release capacity would be a sudden collapse in the import boom in the US. While there are no signs of this happening right now, it is a possible scenario for 2022. Over the past 62 years since the data was first measured in the US in 1959, consumer spending has gradually shifted from goods to services. This has been a gradual shift that has not been impacted by any major events in the past 60 years. Neither the financial crisis a decade ago, the oil crisis of the 1970s, the 9/11 attacks, multiple recessions nor other crises seen in the period have led to a sudden permanent shift in consumer behaviour. As can be seen from the figure, the pandemic in 2020 led to a dramatic shift in consumer preferences for the first time in 62 years. Not because consumers had a desire to change their behaviour, but because they were forced to do so by the pandemic.
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