Late Summer Import Surge From Asia Expected After Strong June

US imports from Asia last month may have slipped from May, but volumes were still up almost 24 percent from a year ago to set an all-time high for the month of June, a sign that with retail inventories low, second-half volumes are unlikely to let up.

Carrier executives are alerting terminal operators at the ports of Los Angeles and Long Beach to expect a spike in imports from China later this month as a backlog of US-bound cargo that had built up in Yantian during the COVID-19 outbreak in May and June arrives at West Coast ports. Adding to the surge in the eastbound trans-Pacific will be the traditional peak shipping season that runs from August through October.

US imports from Asia in June totaled 1,521,431 TEU, a new record for that month. That was down 8.8 percent from 1,668,536 TEU in May, which was the strongest May ever for Asia imports, according to PIERS.

June capped off the busiest first half ever in the largest US trade lane. Imports from Asia totaled 9,523,959 TEU, up 38 percent from 6,902,147 TEU in the first six months of pandemic-wracked 2020 and 24.5 percent higher than the 7,649,095 TEU in the first half of 2019.

SSA Marine, which operates three terminals in Long Beach and the largest container terminals in Oakland and Seattle, was told by its carrier clients to expect a spike in imports later this month and into August. “Everybody is hearing that,” Ed DeNike, president of SSA Containers, told last week.

Jon Monroe, who serves as an adviser to non-vessel-operating common carriers (NVOCCs), told clients last week in his newsletter that an import surge is on the way now that Yantian is digging out of its backlog. Other Chinese ports that had picked up some of Yantian’s business during the COVID-19 outbreak there are also clearing out their backlogs.

“West Coast ports are expecting to be besieged by vessels delayed at Yantian at the same time we enter the peak surge. This comes at a time when NVOCCs are facing possibly the worst backlog of unshipped containers from China ever,” Monroe said. He said Yantian had experienced the worst backlog, but vessels also backed up in Shanghai and Ningbo.

Alan Murphy, CEO of Sea-Intelligence Maritime Analysis, said in his Sunday Spotlight report on July 4 that the strength in imports so far this year has been driven in large part by US retailers scrambling to rebuild their inventories. The retail inventory-to-sales ratio, which was down to 1.07 in April, according to the US Census Bureau, had never dropped below 1.34 in the 28 years before the COVID-19 pandemic, Murphy said.

The monthly record and near-record import volumes the past six months have taken a toll on terminals in Los Angeles-Long Beach. They have contended with vessel bunching, congested yards, long truck queues, equipment shortages, and record rail container dwell times for much of the year. However, conditions improved somewhat the past two months, and terminal operators told at the time they were optimistic that the backlogs would be cleared by the end of July. Now they are not so sure.

“I was an optimist, but I’m not sure now we’ll be out of this by the end of the month,” said the terminal operator who did not wish to be identified.

Source: Port of Los Angeles