 COVID-19 triggers early trans-Pac peak season import spike |
Source |
American Shipper |
Post Date |
08/18/2020 |
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Retailers are foreing that August could be the busiest month of an early and highly unusual trans-Pacific peak season following a July that saw US imports from Asia grow year on year for the first time since September 2019.
Normally, US imports remain elevated for the three-month peak season of August through October, and then taper off in November. Most of the holiday season merchandise arrives at US ports by early November in order to hit the store shelves for the Black Friday sales after Thanksgiving.
This year, however, imports began to build in July due to a combination of retailers replenishing inventories that drew down once stores began to re in the late spring, while consumers stepped up purchases of home-office equipment and personal protective equipment (PPE). Total US containerized imports fell 3.5 percent year over year in July, but volumes from Asia ticked up 0.9 percent after declining for nine consecutive months dating back to October 2019, according to PIERS, a JOC.com sister company within IHS Markit.
With retailers ordering less merchandise this year due to the economic impact of the COVID-19 pandemic, the National Retail Federation (NRF) predicts holiday season imports will peak in August and to slow somewhat after that. In fact, even though August will be the busiest month of the peak season, the projected retail imports of 1.81 million TEU would make it the lowest peak month since 2016, according to Global Port Tracker, which is published monthly by the NRF and Hackett Associates.
¡°This year, peak season seems to have been thrown off by the coronavirus pandemic, along with just about everything else we consider normal,¡± Ben Hackett, founder of Hackett Associates, said in the August Global Port Tracker report.
Imports from China rebounding
Leading the increase in volumes from Asia, US imports from China increased 1.3 percent in July, the first year-over-year increase since January 2019. Imports of Chinese goods first began to f at the onset of the now two-year-old US-China trade war, which was then compounded by the economic shutdown in China in early 2020 and the cratering of demand in the US that began this spring, both caused by the COVID-19 pandemic.
Despite the modest improvement in July, however, US imports from Asia in the first seven months of 2020 were down 7.4 percent compared with the same period last year, while imports from China tumbled 13 percent, according to PIERS.
Despite the predictions of an August peak, Global Port Tracker projects year-over-year monthly declines in total US containerized imports through the remainder of 2020. Imports are fore to decline 7.3 percent in August, 9.5 percent in September, 10.4 percent in October, 5.8 percent in November, and 9.6 percent in December from the same months last year.
¡°The economy is recovering, but retailers are being careful not to import more than they can sell,¡± said Jonathan Gold, NRF¡¯s vice president for supply chain and customs policy. ¡°Shelves will be stocked, but this is not the year to be left with warehouses full of unsold merchandise.¡± Calar year 2020 imports are projected to decline 7.6 percent from 2019, according to GTA Foreing, a division of IHS Markit.
While August is fore to be the busiest month of the peak season, carriers and non-vessel-operating common carriers (NVOs) told JOC.com on Monday they expect imports from Asia to remain strong at least through September. However, a dip is expected in the first week of October as factories in China close for the annual Golden Week celebrations. Those industry sources say that given the uncertainties surrounding COVID-19, it is difficult to predict import volumes beyond t
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