Import volumes to USA continue to grow

Sea-borne imports into the United States have grown by more than a quarter compared to pre-COVID 2019 levels and this at a time when the trade press is full of reports about deglobalization, near-shoring, and global economic tensions.

Despite the stories about businesses decoupling from China, supply chain de-risking, and near-shoring, imports continue to flow, with bookings for containerised imports into the US up 27% compared to 2019 and 11% over last year.

US import growth began to accelerate in Q4 2023, with increases of 4% in October, 5% in November, 10% in December, 11% in January, 32% in February, and 24% in March. The Port of LA’s Q1 2024 volumes rose by 30%, and East Coast volumes through Savannah were up 17%.

Restocking may be a primary reason for the growth in import traffic, but this year’s volumes are also driven by shipper concerns over container-ship capacity being tied up in longer transits around the Cape of Good Hope. Carriers are diverting away from the Suez Canal to avoid conflict in the Middle East. 

While this diversion does not directly impact North American import lanes from Asia, it does affect global capacity, as more resources are needed on Asia to Europe routes, potentially reducing ships available for other services, including transpacific routes.

Sea freight spot rates began to climb with the growing conflict around the Suez Canal and pre-Lunar New Year demand, fluctuating but remaining well above pre-pandemic norms. 

The surging cargo demand and high freight rates have prompted many carriers to relaunch transpacific services, 18 months after their withdrawal. Some of the largest carriers are also introducing new services between Asia and the Americas to capitalize on the strong market, with US retailers upgrading import forecasts through September.

SeaLead, Taiwan’s TS Lines, and China’s BAL Container Line are among the intra-Asia carriers returning to the transpacific trade. Additionally, Cosco, Wan Hai, Maersk, and MSC are launching new Asia-Americas services.

Despite the new capacity, global average schedule reliability hovers just above 50%, and there are equipment shortages at many origins. This means shippers are again dealing with uncertainty in rates and services, prompting many to bring orders forward to offset anticipated longer lead times.

This year’s sea freight booking data shows a noticeable absence of the seasonal demand softening usually seen in April. Bookings fell 15% from early April to mid-May in 2023, but only 5% this year. The peak season for import demand typically occurs in July and August, but if sufficient orders have been brought forward, the peak season may be muted. Alternatively, if the peak season follows its traditional trajectory, volumes could skyrocket, returning us to an extremely uncertain environment we thought we had left behind.

Domestic transportation has also been affected, with rail volumes up 16% and backlogs mounting on the West Coast. Los Angeles’ outbound truckload tender volumes are up 35%, pushing tender rejection rates to their highest levels since 2022, with spot rates rising 7% over the past month and 21% since March.

Noatum Logistics leverages long-term ocean carrier relationships and global buying power to deliver cost-effective, resilient, and reliable solutions that optimise every supply chain. 

If you have concerns or questions regarding any of the issues highlighted here, we can provide insights, advice, and guidance. EMAIL Matt Fullard.