 Double-digit trans-Pacific volume growth projected through first half |
Source |
American Shipper |
Post Date |
01/15/2021 |
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The double-digit percentage growth in eastbound trans-Pacific volumes that took place in the second half of 2020 is projected to continue through January this year, and will likely accelerate this spring as monthly volumes are measured against unusually weak imports in early 2020.
¡°As we are expecting this surge to continue past Christmas and into the new year, the question then becomes one of ¡®how much,¡¯¡± said Alan Murphy, CEO of Sea-Intelligence Maritime Analysis.
Answering his own question, Murphy said the import boom will continue as long as the coronavirus disease 2019 (COVID-19) forces North American consumers in 2021 to sp their income on merchandise rather than on services such as travel and entertainment.
The first half of 2020 in the eastbound trans-Pacific was marked by six consecutive months of year-over-year declines in US imports from Asia, averaging about 10 percent per month, according to PIERS, a sister product of JOC.com within IHS Markit. However, 2020 was a tale of two halves, as monthly imports from Asia grew an average of 15.1 percent year over year from July through November.
Murphy projected that the growth seen in the ¡°exted peak¡± of last summer and fall will actually accelerate in early 2021, given the increased vessel capacity carriers are deploying into the new year. ¡°Deployed capacity is dictated by demand,¡± he said in Sea-Intelligence¡¯s Sunday Spotlight newsletter.
Murphy said imports from Asia moving through the West Coast ports in North America would increase about 30 percent year over year in the period from November through January. The West Coast ports account for about 60 percent of US imports from Asia, according to PIERS.
In order to accommodate the growing cargo volumes and the e-commerce requirements for speed to market, trans-Pacific carriers in the second half of 2020 launched three new weekly services, and these strings continued to operate into the new year. Matson Navigation Co. added a second loop from China to Long Beach, and Mediterranean Shipping Co. launched its Santana service from China to Long Beach. CMA CGM added a premium service from China to Los Angeles.
Weaker comparisons
The unusual strength of eastbound trans-Pacific container volumes that occurred during the summer and fall months of 2020 is evidenced by the fact that imports during those months were compared with relatively strong import volumes during the same months in 2019.
This means that when imports from Asia in January through June 2021 are compared with the unusually weak import volumes in the first half of 2020, the year-over-year growth percentages should be even more impressive over the coming six months.
It remains to be seen whether other factors that made 2020 such a unique year in the trans-Pacific ¡ª persistent container shortages and cargo rolling at Asian load ports, dismal schedule integrity from ocean carriers, and vessel bunching at the largest North American gateway of Los Angeles and Long Beach ¡ª will be in play this year.
These issues are important in the trans-Pacific trade because they huge operational bottlenecks at North American ports, and they have a direct impact on vessel capacity. Last fall, non-vessel-operating common carriers (NVOs) told JOC.com that despite record volumes, some vessels left Asian ports at less than full capacity because of equipment shortages.
NVOs are confident they will increase their share of US imports from Asia in 2021, while direct carrier bookings by beneficial cargo owners (BCOs) will decline in market share due to anticipated uncertainties among retailers concerning consumer purchasing habits and the impact of COVID-19 vaccines on the economy.
NVOs say their business thrives during periods of uncertainty and disruption, because they have space commitments from multiple carriers and therefore have greater access to vessel capacity than BCOs who contract with a few core carriers. NVOs¡¯ share of US imports from Asia in January through September was 47 percent, up from 44 percent in 2019, according
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