Retailers are forecasting 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 reopen 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 begin 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.
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 falter 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 forecast 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.
Calendar year 2020 imports are projected to decline 7.6 percent from 2019, according to GTA Forecasting, a division of IHS Markit.
Source: Journal of Commerce