Us ports handled a record number of imported containers in June, making it the country’s biggest June ever. It also comes amid a growing body of data and analysis pointing to a slowdown in U.S. demand for Asian exports.
According to the McCown report, imports from the top 10 US ports rose 5.9 per cent year on year to 2.165 million TEU in June, accelerating from April (5.1 per cent) and May (3 per cent).
Freight traffic continued to shift east. Imports from major Ports on the East and Gulf coasts rose 9.7% from a year earlier to 1.086 million TEU, driven by double-digit growth at the ports of New York-New Jersey, Houston and Savannah. Imports from West Coast ports rose 2.3 per cent year-on-year to 1.078m TEU.
John McCown, author of the report, said the trend in east-west freight traffic continued to accelerate in June, with the result that there were now as many ships waiting to berth at the ports of New York and Houston as there were at Los Angeles and Long Beach.
As of Tuesday morning, 140 container ships were waiting offshore at North American ports, according to MarineTraffic’s location data and the latest ship waiting list. Of those, 37 percent were at West Coast ports and 63 percent were at East Coast and Gulf Coast ports, with long lines around the ports of Savannah, New York-New Jersey and Houston.
Us port imports hit a new high! But data and analysis point to a slowdown in U.S. demand for Asian exports
McCown said port congestion has evolved from primarily affecting the West Coast to all coastal areas. It points out that congestion at US ports is mainly due to the inability to move containers out of terminals rather than from ships.
The increase in imports from US ports comes amid a growing body of evidence, data and analysis of slowing US demand for Asian exports.
FreightWaves Snoar’s index of bookings to US ports, based on ship departure dates, fell sharply in May and remained subdued in June and July. As of Tuesday, the index was down 32 percent from May 1 and 33 percent from the same period last year.
Us port imports hit a new high! But data and analysis point to a slowdown in U.S. demand for Asian exports
S&P Global Commodities reported on Monday that there was “ample room” for ships leaving Asia for North America. Now some are predicting a mild season, a shipping line source said.
Ben Nolan, shipping analyst at Stifel, said: “The demand for container traffic continues to far exceed the capacity of the terminal infrastructure. The question is, can traffic keep growing as consumers switch from goods to services? We don’t think so.” Given that there are so many bottlenecks throughout the supply chain, Nolan expects that the correction of freight rates is likely to be gradual and that shipping companies should reap substantial returns in the process.
Jon Monroe, a shipping consultant for trans-Pacific markets, said the drop was due to US shippers delaying or cancelling overseas orders. “Many retailers suspended orders or slowed purchases in June and July and expect to receive them again in August. Warehouses are full and benefit shippers have overspent and overordered in the first quarter of this year.”
The Census Bureau reported Friday that retailers’ adjusted inventory-to-sales ratio hit 1.2 in May, the highest level since February 2021. The move comes after major retailers such as Wal-Mart and Target said they had excess inventory, and Target announced it would cut prices, eliminate excess inventory and cancel purchase orders.
One Boston-based freight forwarder said orders for low-value furniture and home goods shippers fell the most. But high-end home goods retailers are still ordering, as are fashion and clothing shippers, he said. “They have slowed down their purchases and I think it will be temporary. There’s a lot of demand, just not as much froth.” “Orders could easily pick up again in August or September,” he said.
In addition, rising inflationary pressures have left consumers with less disposable income and less money to spend on goods. Consumer spending on goods fell 0.7 per cent in May, with durable goods falling 3.2 per cent and spending on non-durable goods and trade in services rising.