The 5% Drop in Global Sea Freight Rates in October Raises Fears of Recession

In September, sea freight prices all around the world reached a standstill as global trade volumes slowed as a result of shrinking demand for goods. At the start of October, there was a decline in freight demand and a significant drop of 5% in freight costs. While freight rates have also decreased due to the easing in supply chain disruptions that were built up over the pandemic, a lot of the slowdown in container and vessel demand was due to weaker cargo movement. If November unfolds similarly, the global economy risks entering a recession as consumer demand decreases amid rising costs of living and high levels of inflation. Europe seems especially vulnerable with the Russia-Ukraine war dragging on and a weaker economy than in the COVID-19 pandemic.