Shipping companies are witnessing a massive turnaround in demand momentum from the pandemic highs. The war-driven inflationary pressures are driving down consumer demand, in effect ballooning the inventories at retailers’ stores. Furthermore, COVID-19-related lockdowns in China and concerns related to Europe’s winter energy crisis have aggravated the already-weak consumer sentiment. A combination of all these factors has resulted in a slump in demand for worldwide cargo and shipping services. Many shipping stocks could see a significant drop as a result.
Shipping Companies Cutting Voyages
As per a Wall Street Journal report, Trans-Pacific shipping rates have fallen almost 75% from their year-ago highs. In response, shipping companies are cutting down their planned voyages and capacity offerings. The period between late summer and the beginning of fall is usually marked by high demand for shipments as retailers prepare for the holiday season. This year, however, ocean liners are taking a hit owing to the tough macro backdrop.
As per data companies, a total of 40 planned shipments to the U.S. West Coast from Asia were canceled. Similarly, 21 planned sailings to the East Coast were abandoned. Notably, daily freight rates are down to nearly $3,900 to move a single container across the Pacific, as compared to $14,500 in early 2022 and over $19,000 in 2021, as per the Freightos Baltic Index.
What are the Best Shipping Stocks to Buy?
Here’s a list of shipping companies that may be affected by the current slump in demand. Investors might want to keep watch on these stocks as the situation unfolds for an opportunity to buy the dip.
- ZIM Integrated Shipping Services – (NYSE:ZIM) (DE:2SV)
- Star Bulk Carriers – (NASDAQ:SBLK) (DE:4FAP)
- Eagle Bulk Shipping – (NASDAQ:EGLE) (DE:E1B1)
- Diana Shipping – (NYSE:DSX) (DE:DSZ)
- Danaos Corp. – (NYSE:DAC) (DE:DVW1)
- Navios Maritime Partners – (NYSE:NMM) (DE:3PXA)
- Genco Shipping – (NYSE:GNK) (DE:GNU1)
- AP Moller Maersk – (AMKBY) (DE:DP4H)
- Euroseas – (NASDAQ:ESEA) (DE:2LE1)
- Seanergy Maritime – (NASDAQ:SHIP) (DE:RHSR)
- Capital Product – (NASDAQ:CPLP) (DE:7CPA)
