US Imports Remain High With Signs of Softening of Container Spot Prices

 

Container import volumes remain strong at U.S. ports and significantly ahead of 2023 levels despite the first signs of softening in the spot market prices. Yet the outlook remains strong spurred on by the resiliency of the U.S. economy and consumers' willingness despite inflation concerns to continue spending.

Descartes Systems Global which provides systems for logistics-intensive businesses issued its monthly Global Shipping Report showing what they termed “robust growth,” as volumes were up more than 10 percent over 2023. While imports from China remained strong, up nearly 14 percent versus 2023, they were flat versus the prior month. Further, they cite a decline overall of just over two percent for import container volumes in June.

A further sign came from the reports for spot rates. The Shanghai Index for example broke a 13-week streak falling nearly two percent this week on the benchmark between Asia and the Southern California ports. Another closely followed benchmark, Drewry’s World Container Index showed signs of flattening while analysts cautioned they expect rates to remain high.

“Lulls between supply chain challenges seldom last long, and importers are currently looking at issues including high shipping rates, unresolved port labor negotiations, and continuing capacity and congestion issues from the ongoing disruptions in the Red Sea,” said Jonathan Gold, Vice President for Supply Chain and Customs Policy at the National Retail Federation. “Despite all of that, we’re experiencing the strongest surge in volume we’ve seen in two years, and that’s a good sign for what retailers expect in sales.”

The retail trade group raised its forecast for the current quarter noting that despite high shipping costs and a variety of supply chain challenges, retailers are stocking up. It is the beginning of high season and ports have been gearing up expecting retailers to build inventory going into the strong sales periods from now till the end of the calendar year.

The NRF calculates the retailers’ import volumes have been on a steady increase since March 2024. Volumes went back over 2 million TEU in April, the first time since 2022, and the NRF now projects they will peak at 2.22 million in August. They however are expected to remain above the 2 million TEU mark at least till November. The NRF is calling for 13 to 15 percent monthly increases year-over-year through August before growth moderates measured against the 2023 peak season.

The Global Port Tracker is now projecting more than 6.5 million TEU for the third quarter of 2024 at the U.S.’s major ports. The NRF raised its forecast by more than three percent versus last month and more than six percent versus the May forecast. 

The retailers are projecting when the final tally is done, that second quarter container import volumes will be up more than 14 percent over the same period in 2023. They point to political concerns as the U.S. moves toward presidential elections and the danger of an East Coast dockworkers strike, but at the same time have a strong outlook based on current consumer spending levels.

While there continue to be concerns about port congestion in China and elsewhere in Asia, Descartes points out that port transit delays in the U.S. remain low despite the significantly higher container volumes.