Signs Show Trans-Pacific Import Surge Continues Into Q2

There are many signs, including North American importers beginning to front-load shipments that would normally be sent in the late summer and early fall, solidifying an already bullish outlook for trans-Pacific trade in the second quarter.

US retailers lost sales last year when consumer demand exploded faster than their ability to restock shelves, sending freight rates skyward and carrier on-time performance to near-record lows. As a result, some retailers are shipping their back-to-school and holiday-season merchandise earlier this year, which, coupled with shipments held over from the first quarter due to vessel delays and port congestion, would make the traditional early summer lull not much of a lull at all.

Seeming unrelenting North American demand for Asian goods, further fueled by the $1.9 trillion US federal stimulus package and coupled with nearly maxed-out equipment availability, point to another quarter of near-record import volumes, freight rates, and logistics constraints, according to forwarders, shippers, and carriers.

The logistics director at a national retailer who asked not to be identified told Wednesday consumer demand is strong and the retailer was moving quickly in service contract negotiations to lock in space for the coming quarter and beyond, in part because it is expecting “pretty solid double-digit” percentage growth in volumes, he said.

In conversations with, five non-vessel-operating common carriers (NVOs), two industry consultants, and two national retailers said import volumes in the second quarter will remain at or above current levels for at least the next month, soften a bit in May-June, and then increase again as the peak season approaches.

From July 2020 through February, total US imports from Asia rose 17.5 percent to just shy of 12.6 million TEU compared with the same eight-month period a year prior, including a 27.3 percent year-over-year jump in February, according to PIERS. And US retailers are projecting double-digit year-over-year growth in US imports each month through June, according to Global Port Tracker.

Vessel delays in Los Angeles-Long Beach are pushing cargo that should enter the US in the first quarter into the second quarter, according to an NVO who asked not to be identified. Shipments of furniture, carpets, light bulbs, televisions, kitchenware, and other general merchandise cargoes are not falling off at all.

“We don’t see any let up for now. We have so much freight booked that won’t make it in by the end of the month that we’ll have to roll it to next month,” he said.

Although forwarders generally do not have firm insight into bookings more than two or three weeks out, Jon Monroe, who serves as an advisor to NVOs, said clients are expecting strong bookings in the coming two months.

“I am talking to a number of people who say it will be a ‘bang-up’ second quarter,” Monroe said. One client told Monroe it will be a “great year” for appliances of all types.

With COVID-19 pandemic stimulus checks already starting to be deposited into US consumers’ bank accounts, the import demand seen in the first quarter is expected to bleed into the second quarter. Spending on consumer goods is likely to remain strong at least until summer, when consumers may begin shifting some of their spending to travel and entertainment, especially after they get vaccinated, the NVOs said.

An industry consultant who formerly managed logistics for national retailers said import volumes could soften a bit in June and July as families return to traveling for summer vacations, but demand for goods should pick up strongly in August at the beginning of the peak holiday-shipping season.

Source: Journal of Commerce