 US store reings lift Asia imports in June |
Source |
American Shipper |
Post Date |
07/21/2020 |
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US imports from Asia increased to 1.27 million TEU in June, up 9.5 percent from May, reflecting the spurt in consumer demand generated by the reings of stores and restaurants in some states.
Imports from China, meanwhile, totaled 855,722 TEU, up 13.8 percent from May, according to PIERS, a JOC.com sister company within IHS Markit.
Higher imports, coupled with 86 blank sailings in the trans-Pacific in May and June.
However, the escalation of imports and rates in the largest US trade lane has likely peaked for now because some states that reed their economies in May are considering new shutdowns as coronavirus disease 2019 (COVID-19) cases nationwide surged to over 3 million this week. This could dampen consumer purchases of back-to-school, Halloween, and possibly holiday season merchandise as retailers enter their busiest time of the year.
Year-over-year imports from Asia, especially China, remained in negative territory in June despite the month-on-month gain from May. US containerized imports from Asia declined 3.7 percent from June 2019, but that was a noticeable improvement from the 16.5-percent decline in May imports from May 2019, according to PIERS.
US June imports from China, while higher month on month, were down 0.9 percent from June 2019. Still, that was an improvement from the 16 percent decline in imports in May from May 2019. China continues to underperform the rest of Asia because of the two-year-old US-China trade war.
Aggressive capacity management pushes rates higher
Citing the canceled sailings in May and June that were reported this week by Sea-Intelligence Maritime Consulting, non-vessel operating common carriers (NVOs) say rates in the Asia-US trade reached a 10-year high because carriers reduced total capacity in the trade below demand. In the first week of July, rates were pushed higher by general rate increases (GRIs) as well as peak-season surges.
The tr of US imports from Asia and China has been choppy in recent months as the economy recovers in fits and starts. Year-over-year imports from Asia declined 18.3 percent in March, 1.1 percent in April, 16.5 percent in May, and 3.7 percent in June, according to PIERS. US imports from China declined 40.1 percent in March, 10.4 percent in April, and 16 percent in May before the slight dip in June.
The June import spike from Asia, which has exted into the first two weeks of July, was due to inventory replenishment by retailers, seasonal imports such as back-to-school merchandise, and continued strong movements of personal protective equipment and other medical supplies, according to NVOs. However, it appears that imports could pull back as early as next month if back-to-school sales disappoint and retailers are forced to shut down again.
Global Port Tracker, which is published monthly by the National Retail Federation and Hackett Associates, projected in its July edition that imports will decline 13.3 percent in August and 12.3 percent in September from the same months last year. But the fore says the year-over-year declines will moderate to 9.9 percent in October and 0.6 percent in November.
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