Experts have been predicting a U.S. recession for a year, but it hasn’t happened yet. Containerized imports haven’t slowed down yet, and they haven’t shown any signs of doing so either. Instead, they have stayed at or slightly above their “normal” levels before COVID.
On Monday, Descartes reported that the general number of twenty-foot equivalent units brought into all U.S. ports in June was 2,081,793, a rise of 6% from June 2019 (before the spread). Imports were up 2% in the first half of this year compared to the same time last year. Imports hit a new low in February, but last month they went up by 20%.
June Imports Show Smaller Decline Compared to Previous Years
June is usually a slower month for imports than May, except in years when there is an epidemic. Imports fell by 0.7% in June compared to the previous month, which was less than what had happened in previous months.
According to Descartes, imports dropped 5.9% from May 2019 to June 2019, 2.2% from May 2018 to May 2019, and 3.5% from June 2017 to June 2018.
In addition, National Retail Federation and consultant Hackett Associates produce Global Port Tracker, which follows imports to 12 major U.S. ports based on official information supplied by the ports themselves.
The final numbers for June are not out yet. Global Port Tracker believes that the volume at the ports it tracks increased by 4% year over year to 1.86 million TEUs last month. The volume stayed the same from June 2018 to June 2019.
U.S. Imports Expected to Remain Strong with Slight Decline in Fall
Global Port Tracker says that the highest number of monthly imports would be 2.03 million TEUs in August. After that, the number of imports would go down slightly each month. The study says that U.S. imports will be 2-3% higher in the first eleven months of this year than they were in 2018-2019.
Ben Hackett, founder of Hackett Associates, stated that consumer demand remains stable and consumers have continued to spend, despite retailers and wholesalers reducing their inventories.
He maintained that the prospect of a recession is looking less likely.
A news release says that U.S. import sales have been going up since early May and are now on track to be higher than in 2019. Since December 2022, the most plans have been made for Saturday flights than any other day.
Freight Rates Show Resilience as Imports Remain Strong
Given how long it takes for goods to get to the U.S. from foreign loading ports, this means that imports will stay strong through the summer.
How does the current level of demand affect freight prices, and what does that mean for ocean companies’ profits?
Spot prices have gone down a lot since they were so high during the COVID boom, but this was an outlier. The bigger question is how the spot rates now relate to those before the outbreak when trade was normal.
Index companies don’t use the same set of data or the same set of steps. So, their ratings are different, even if they all tend to go in the same way.
After rising above pre-COVID levels in May and June, the Drewry World Container Index (WCI) shows that spot prices between Asia and the U.S. are now almost back to where they were before COVID. The WCI said that the average market price from Shanghai to Los Angeles was $1,638 per forty-foot equivalent unit for the week that ended on Thursday. This was the same as the same week in 2019 and 7% higher than the same week in 2018.
Spot Rates for Freight Between China and U.S. Coast Fall Below Pre-COVID Predictions
The WCI for the road from Shanghai to New York shows the same pattern: spot rates were higher than normal in May and June, but they are back to where they were before COVID in July. The WCI Shanghai-New York estimate for the week that ended on Thursday was $2,590 per FEU, which is the same as 2018 but 4% less than 2019 rates.
The falling trend in the Freightos Baltic Daily Index (FBX) is stronger than in Drewry’s WCI.
In May and June, the FBX China-West Coast spot index was pretty steady at values for 2018 and 2019, but in July, it fell below predictions made before COVID.
On Friday, the FBX China-West Coast index was worth $1,356 per FEU, which was 18% and 12% less than the same time last year.
The FBX China-East Coast index is now selling at $2,381 per FEU, which is 14% below its 2019 high and 19% below its 2018 low.
In conclusion, even though COVID is having an effect, the United States is importing more things that are shipped in containers. In June, 2,081,793 twenty-foot comparable pieces were brought into the U.S., which is 6% more than in the same month of 2019. Because of this, more shipping and logistics services might be needed to move these things, which would be good for these companies. For more such news about logistics and the trucking industry follow Lading Logistics.