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August 28 2023

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August 28, 2023 | Journal of Commerce 15 Special Report Container Shipping Quarterly and Hackett Associates, US imports will peak in August. "August is forecast at 2.03 million TEUs, down 10.2% year over year, but the first month since last October to reach 2 million TEUs," the Aug. 7 GPT said. Carriers, forwarders and industry analysts say that after experienc- ing almost two consecutive years of record or near-record import volumes in late 2020 through mid- 2022, followed by double-digit declines in import volumes late last year and earlier this year, the trans-Pacific is returning to the nor- mal seasonal ups and downs of the pre-pandemic days. That means import volumes should peak in August through October and fall off in November and December, which would put a lid on spot rates. In its Aug. 1 earnings call, Mat- thew Cox, chairman and CEO of Matson, said that compared to the peak seasons of 2021 and 2022, the trans-Pacific trade will experience a "muted peak season" this fall. "We further expect the trade lane to experience a more normal- ized level of consumer demand and retail inventory stocking levels," Cox said. The return to normalized con- sumer demand and retail inventory stocking levels will take place as carriers begin to introduce record capacity into their fleets begin- ning late this year and continuing through 2024. The global order book capacity is close to 30% of the active fleet at more than 7 million TEUs, according to maritime consultancy Drewry. About 2.5 million TEUs of capacity is scheduled for delivery by the end of this year, with 3 million additional TEUs scheduled for deliv- ery in 2024, Drewry says. The influx of large new container ships, mostly on the Asia-Europe trade, will have a cascading effect as somewhat smaller vessels serv- ing that trade will move to the trans-Pacific and other trade lanes. That is why forwarders and industry analysts expect the latest increase in spot rates will likely be the last increase for some time, with spot rates expected to move lower begin- ning in November. JOC email: Bennett, likewise, sees this as the last GRI for a while. "This will probably be the [rate] ceiling," he said. "This will hold through Sep- tember or early October." According to Global Port Tracker (GPT), which is published monthly by the National Retail Federation International, said that with most of the purchase orders for holiday merchandise having been placed with Asian factories by now, import volumes, and therefore rate hikes, are topping out. "I think the [spot] rates are hit- ting their ceiling," Sur said. Carriers have announced another round of GRIs averaging $1,000 per FEU, effective Aug. 15. Trans-Pacific spot rates rise sharply into August Container spot rates from North Asia to US West and East coasts, in USD per FEU USD per FEU $10,000 $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 L L Jan 2022 Jul Jan 2023 Jul North Asia to US East Coast North Asia to US West Coast Jun 30, 2023: $2,050 Jun 30, 2023: $2,050 Y-o-Y change: hange -79% W o W change: 0% W o W change: 0% Jun 30, 2023: $1,050 Jun 30, 2023: $1,050 g W-o-W change: 0% W-o-W change: 0% W-o-W change: 0% ge: 0% Y-o-Y change: chang g -85% W-o-W change: 0% Jun, 2023 Jul $1,534 $2,00 Source: Platts, S&P Global © 2023 S&P Global

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