September Containerised Imports From Asia Up 14% Above Pre-Covid Levels: Ship Has Sailed For Last Minute Holiday Orders From Asia Into US
The warning comes as 1.59 million TEU (twenty-foot equivalent unit) imports into the US arrived in September from Asia, up 13.8 percent from pre-COVID September 2019, according to PIERS by IHS Markit. The elevated imports levels from Asia send a clear message that the port-related congestion problems are like to continue into 2022.
High import volumes contributed to the port congestion, including taking longer to move containers off the pier and being unloaded at distribution centres, removing significant capacity from the system over the last few months.
Many retailers prioritised their holiday season shipping needs to get goods in early. The latest US containerised import data shows signs of a slowdown, indicating the ‘rush’ to get goods into the US might be starting to slow, according to data from PIERS by IHS Markit.
“Given the delays in the supply chain and ongoing port congestion, most retailers have prioritised their holiday goods this year, aiming to get them into the country earlier than usual. Unless importers shell out for significantly higher air cargo rates consumer goods that are not in the country by now are unlikely to make it under the tree”, noted Mark Szakonyi, Executive Editor of The Journal of Commerce by IHS Markit
This comes as the latest Port Performance Data by IHS Markit shows that the time vessels spend in key US West Coast ports waiting and unloading cargo deteriorated significantly in August 2021 to 348 hours for Los Angeles (vs 255 hours in July 20219) and 268 hours for Long Beach (vs. 190 hours in July 2021). These numbers are around triple what they would have been before the pandemic in August 2019.
While demand for imports might been slowing from the initial post-pandemic bounce, the global supply chain is also being impacted by the recent Covid outbreaks in China and Vietnam as well as power outages in China leading to more delays in shipments.
“What’s happening in the container shipping market is not entirely a demand-driven phenomenon anymore. Months of COVID-19–induced stress has led to the container supply chain being broken, while the distress continues to be accentuated by congestion, landside restrictions, and lack of equipment”, says Rahul Kapoor, Vice President Maritime and Trade at IHS Markit
The slowdown in imports could be short lived as retailers need to re-stock their warehouses after the holiday sales.
“Despite some short-term let-up, we see the global container and import bottle necks continuing well into the next year. Shipping costs remain elevated and with so much dislocation of containers and port delays, importers and retailers will need to get used to things taking longer and being more expensive to reach the shops”, noted Mark Szakonyi, Executive Editor of The Journal of Commerce by IHS Markit
Source: IHS Markit