Foreign media: U.S. imports affected by seasonal factors and Panama Canal crisis

Source: 5688.cn

Foreign media reports that for container shipping companies, the good news is that the volume of U.S. imports is still higher than pre-pandemic levels. The bad news is that the consecutive monthly increases this year have come to an end. Seasonal factors combined with deteriorating conditions in the Panama Canal led to a decline in imports in November, which is unfavorable for freight rates.

According to data released by Descartes (NASDAQ: DSGX) on Thursday, U.S. ports processed 2,099,408 20-foot equivalent units of imported goods last month, a 9% decrease from October.

Compared to November of the previous year, the volume increased by 7.4%, but this is an easily "comparable" example. In November 2022, there was a mid-term collapse in production due to the large amount of inventory accumulated in the late stage of the supply chain crisis.

China has been the primary country in terms of transaction volume this year, whether it's an increase or decrease. Despite geopolitical tensions and discussions about supply chain diversification, the economies of the United States and China remain closely interconnected.

Descartes' data shows that the total import volume from China to the United States in November was 783,467 standard containers, a decrease of 11.7% from October. The decrease in imports from China accounted for half of the month-on-month decline nationwide, but even so, Chinese freight still accounted for 37.3% of total freight.

Import volumes continue to exceed pre-pandemic levels

Although import volumes have been declining continuously, they still exceed pre-pandemic levels.

According to Descartes' data, imports from January to November increased by 4% compared to the same period in 2019, 4.4% compared to 2018, and 11.4% compared to 2017.

Imports in November of this year increased by 10.4% compared to the same period in 2019, 4.7% compared to November 2018, and 8.4% compared to November 2017.

West Coast regains more market share

Meanwhile, the fortunes of West Coast ports continue to improve.

Earlier this year, due to concerns about labor disputes between West Coast dockworkers and terminal employers, the market share of West Coast ports was taken over by East Coast and Gulf Coast ports.

In June of this year, the two sides reached a new six-year labor agreement, eliminating the labor threat on the West Coast. At the same time, concerns about service to the East Coast and Gulf Coast increased due to low water levels in the Panama Canal, all of which contributed to the West Coast ports regaining market share.

Last month, the import volume of the top five ports on the U.S. West Coast accounted for 43.1% of the total imports, while the import volume of the top five ports on the East Coast and Gulf Coast accounted for 42% (smaller ports accounted for the remaining 14.9%).

In comparison, the ratio in October for major ports on the East Coast and Gulf Coast was 45.1%, while major ports on the West Coast were 39.6%.

Changes in market share are due to a significant decline in freight volume to ports on the East Coast and Gulf Coast in November.

Descartes data based on customs documents shows that the freight volume to the ports of New York/New Jersey (down 62,062 standard containers, a decrease of 16.1% compared to October), Houston (down 46,857 standard containers, a decrease of 26.7%), and Charleston, South Carolina (down 22,632 standard containers, a decrease of 18.7%) saw significant month-on-month declines.

According to Chris Jones, Executive Vice President of Industrial and Service Execution at Descartes, "The Panama Canal drought seems to have finally affected container import volumes at ports on the U.S. East Coast and Gulf Coast. The Panama Canal Authority plans to further reduce daily transit times in the coming months, which could worsen the situation."

Increasing pressure on spot rates

As new ships are delivered and shipping companies continue to struggle with excess capacity, it has been challenging to raise freight rates. The decline in U.S. imports at the end of the year implies further pressure on spot rates.

On Tuesday, the Baltic Exchange's daily freight index (FBX) assessed spot rates for China to the West Coast at $1,620 per 40-foot equivalent unit, a 21% drop from the peak in August.

FBX assessed spot rates for China to the East Coast at $2,501 per FEU, an 18% drop from the peak in August.

Disclaimer: This message has been reprinted from other media, and its publication is for the purpose of conveying more information, and does not imply agreement with its views or confirmation of its description. The content of the article is for reference only and does not constitute any suggestions.