Signs Inflation May Start To Tame - InvestingChannel

Signs Inflation May Start To Tame

Proprietary Data Insights

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Ghost Trucks

TuSimple (TSP) signed a deal with Union Pacific Rail (UNP) to deliver its first autonomous trucks to test a pilot program that travels between the rail yard in Arizona to first and last deliveries without a human operator.

This might seem like a small, focused solution, but think of the ramifications.

Look at the congestion we see at ports.

Now, imagine autonomous trucks moving freight in and out of the yards with the current infrastructure to warehouses and distribution centers hundreds of miles away.

This is the kind of technology that can truly change the game.

And it’s investable too!

There aren’t too many companies working on autonomous driving out there other than players like Tesla (TSLA).

What’s neat about this is how it solves a practical problem right now.

And it has us interested to see where it goes next.


Signs Inflation May Start To Tame

Key Takeaways

  • Maersk expects ocean shipping to normalize in the second half of 2022.
  • Ocean shipping rates have dropped markedly off the highs from back in October.
  • Port congestion is bad but not getting any worse.
  • Recent trade deals will lead to more shipping volume from Europe and Japan.

Go to any shipping yard or port, and you’re bound to see a Maersk container.

The global shipping giant said it sees signs of the ocean freight boom easing.

Maersk’s Take

Container volumes enjoyed huge profits over the last two years as volume and backlogs put them in high demand.

Maersk used this cash to purchase a trucking company, seeking to diversify its revenue streams.

Alongside that deal, the company announced that it expects ocean freight to normalize in the second half of 2022.

Shipping Rates Agree

The Baltic Dry Index provides a benchmark for the price of moving the major raw materials by sea.

Breakwave’s Dry Bulk Shipping ETF BDRY tracks this index.

Since its peak in October, rates have come down substantially, leveling off near prices in line with the highs of 2019.


Current container rates from China to L.A. have dropped from their highs of over $32,000 per container to about $11,200.

And ever so slowly, the congestion at the ports is easing, with the exception of Charleston, South Carolina.

Specifically, in L.A. the amount of ships is at an all-time high but has leveled off around 100-120 vessels.

Source: American Shipper based on data from Marine Exchange of Southern California

Increased Trade

The Biden Administration’s recent deal with the EU to end tariffs on steel and aluminum went into effect on January 1st.

A similar deal was reached with Japan that’s expected to take effect April 1st.

Both are expected to increase trade and reduce inflationary pressures on steel and aluminum which have hampered construction and other industries.

The Bottom Line: Inflation is finally showing signs of easing as we watch shipping rates start to decline.

Shipping companies from Star Bulk Carriers (SBLK) to Danaos (DAC) aren’t likely to see shares trade much higher after a monster run the last two years.

As we highlight in our top post, the structural issues will only be solved through technology. And there are some serious contenders in the mix.

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