US imports from Asia in February jumped 27.3 percent year over year to register a seventh consecutive month of double-digit growth that shows no signs of slowing with the launch of the $1.9 trillion stimulus package that will deliver another shot in the arm for consumer demand.
The nearly 1.35 million TEU of imports from Asia in February were down 17.7 percent from January, but that can be explained by the surge in imports in January before many factories in Asia closed for the Lunar New Year holidays that began Feb. 12. Imports in March appear to be rebounding strongly as factories reopened in late February.
US imports are projected to continue growing into the summer, if not through the peak shipping season that runs from August through October. US retailers expect that sales in 2021, driven largely by online purchases, could exceed 2020’s sales growth of 6.7 percent. Global Port Tracker, published monthly by the National Retail Federation and Hackett Associates, projects that containerized imports will increase by double digits each month through June year over year.
However, the relentless growth in imports since the second half of last year will also intensify congestion problems that some US ports are experiencing. The Los Angeles-Long Beach gateway, which has borne the brunt of the import surge, is bracing for continued operational challenges, said Gene Seroka, executive director of the Port of Los Angeles.
The pandemic stimulus legislation signed last week by President Joseph Biden will provide as much as $1,400 to eligible recipients in the coming months. “Those checks can have a material impact in prolonging the current boom, even though not all stimulus money will be spent on goods, nor will checks be granted to all,” Lars Jensen, CEO and partner of SeaIntelligence Consulting and JOC analyst, said in a commentary on Monday.
Jensen noted that total consumer spending increased $500 billion in January as purchases of furnishings and household equipment, large items that take up a good deal of space in containers, demonstrated that consumers are not backing off on spending. That total breaks down to about $1,500 in spending per person, he said.
Total US containerized imports in February increased 20.3 percent; imports from China alone jumped a massive 44.3 percent, according to PIERS.
Despite high tariffs on Chinese imports during the trade war that dates back to 2018, imports from China have grown faster than total US imports every month since last fall. As consumer demand exploded last year following the reopening of the economy from the coronavirus disease 2019 (COVID-19), factories in China were better positioned than factories in other countries to immediately ramp up to meet the demand.
The huge increase in February indicates China will remain the largest source of US containerized imports. Imports from China last month represented 43.4 percent of total US imports and 64.3 percent of US imports from Asia, according to PIERS. Because China is the largest trading partner of the ports of Los Angeles and Long Beach, and the Southern California port complex accounts for about 50 percent of US imports from Asia, importers can expect continued congestion problems in the Southern California gateway in the coming months, Jensen said.
Source: Journal of Commerce