In the next 12 months, it is estimated that almost fifty new vessels of 5,500 TEU size will be delivered. Many industry observers expect new capacity to exceed trade growth. Demand is driven by the economy. Transportation is often seen as a leading indicator of recession and recovery. The slowdown in consumer spending may therefore dramatically impact the import trade.
Some economists wonder whether the United States is experiencing a new business cycle.
Under the traditional model, economic growth continued until inflation raised prices whereby the Federal Reserve System would raise interest rates and bring the economy to a recession. The Fed would then cut interest rates and the cycle would begin anew. The new business cycle is characterized by a lack of inflation and business over-investment. Recovery of the economy is therefore dependent on business resuming investment after absorbing the existing overcapacity. Earlier this year, a flurry of rumors surrounded the alleged arrest of vessels operated by Cho Yang.