US recession top worry for carriers

Container xChange surveyed 1,200 supply chain professionals to understand the biggest challenges faced by the industry over the next six months. Almost half (49%) listed recession in the US as their top concern, followed by geopolitical tensions and rising operating costs.

“A vicious circle of increasing interest rates, rising instability in the banking sector, tightened access to credit, falling commercial real estate values and eventual recession is underestimated by the overall market, and has significant implications for supply chains,” said Christian Roeloffs, co-founder and chief executive of Container xChange.

Geopolitical tensions, particularly the Ukraine war and between China and Taiwan, are also of concern.

“These high-risk geopolitical tensions could potentially lead to the fractionalisation of trade blocks and potentially a world where trade becomes less efficient because you cannot trade with everybody anymore.

“Trade becomes restricted to blocks. Currently, it looks like there might be two major blocks but in future, there might be more,” said Roeloffs.

Container xChange expects rising operating costs to impact profit margins which are already under threat due to a falling demand for freight. Soaring energy prices and labour costs plus a shortage of depot space are pushing up costs and terminal tariff hikes across Europe and India are also causing concern for carriers.