FMC Keeping Close Eye on Capacity Issues as Economy Teeters, Dye Says
CORONADO, Calif. -- The Federal Maritime Commission is “carefully monitoring capacity” as the potential rises for economic troubles on the horizon, with some predictions calling for a repeat of 2009, FMC Commissioner Rebecca Dye said in remarks at the Western Cargo Conference Oct. 7.
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Ocean shipping rates have plunged 60%, as demand for cargo space has “declined sharply,” Dye said. “We see a market in transition.” There has been a “substantial drop” in cargo demand in the trans-Pacific, and Atlantic cargo has been affected by events in Europe. Added to that is a shift in cargo from West Coast to East Coast ports, Dye said.
“I am very concerned about the fact that we may be in store for a hard landing,” Dye said. In 2009, demand collapsed at the end of the home mortgage crisis, with over 550 container ships tied up and cargo being carried between Asia and Europe at zero rates, she said. Then, in 2020, “every importer in the United States” decided to restock, causing capacity to plummet, Dye said.
“We will keep in close touch on this and watching this very carefully,” Dye said. “But it’s not over yet.”