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Rush to re-stock inventories in US fizzles out, transpacific imports down

US import growth slowed considerably year on year in August from June, rising just 1

Rush to re-stock inventories in US fizzles out, transpacific imports down
21 September 2018 - 19:00
US import growth slowed considerably year on year in August from June, rising just 1.2 per cent compared with July's 9.1 per cent increase, while import volume declined 1.5 per cent from July to August, traditionally regarded as the height of the peak season.

Import growth has also slowed at the Canadian ports of Prince Rupert and Vancouver, both of which are gateways for US-bound cargo from Asia. Prince Rupert reported that laden import volume in August was down 23 per cent from 2017 to 38,555 TEU, while Vancouver's laden import volume dropped seven per cent to 135,398 TEU, reported IHS Media.



These results raise questions as to how dramatic the post-peak season decline will be and if it will occur earlier than normal after shippers front-loaded their supply chains to dodge the tariffs that will impact half of the US-China container trade.



The slowing volume growth, along with deployed extra-loaders, put a dampener on soaring spot rates, with the price to move an FEU from Asia to the US west coast up only 0.7 per cent to US$2,349 in the week ending September 15, compared with the prior week.



Eastbound spot rates to the east coast dipped 0.2 per cent over the same period to $3,512 per FEU, according to the Shanghai Shipping Exchange's Shanghai Containerized Freight Index.



The strong year-on-year growth in spot rates corresponded with 10 per cent growth in US import volumes in July on a year-on-year and month-to-month basis to 2.2 million TEU.



That surge, combined with carriers cutting capacity to the US west coast by six per cent and capacity to the east coast by 1.3 per cent, led to spot rates reaching new highs in 2018 and rolled cargo as capacity filled up and shippers worked to boost inventory.



Shipping lines such as HMM, CMA CGM, Maersk Line and Evergreen announced that in September they would either upsize vessels in existing weekly services or add single-voyage extra-loader ships to plug the expanding gap between supply and demand.



Shippers and carriers should expect import volumes to remain strong for the remainder of September ahead of the Golden Week holiday in China. The National Retail Federation's Global Port Tracker predicts import growth of 4.9 per cent in October and 2.6 per cent in November.

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