There is no relief in sight for ocean shippers looking for a downturn in rates on the Transpacific route, as spot prices have risen another 7% in the last week between China/East Asia and the North American West Coast.
Volume flowing to the West Coast is expected to stay elevated in the coming weeks, with the forecast from the Port of Los Angeles showing volumes up nearly 503% YoY in the second week of March.
How long the demand for Transpacific freight will last depends on how much consumers keep buying, potentially leaving businesses to work through a tight market to restock. The volume comes after inventories were purposely kept low in the early days of the pandemic, only to be met with a surge in consumer demand that no one expected.
Despite the efforts by ocean carriers and port workers to move unprecedented levels of cargo through the first two months of the year, retail inventories are still well below where they were at this point last year, according to figures from the Census Bureau.
The latest figures for January retail sales show demand is still strong and if retail sales don’t fall then import growth for the entirety of 2021 will remain elevated compared to 2019, simply in order to rebuild inventories.
The retail industry has suggested that import records would continue through the first half of 2021, without making any projections past that point. However, if retail sales remain elevated then port workers and ocean carriers could be in for a long year while shippers could be struggling with congestion for some time to come.
Additional information may be obtained by contacting your local Delmar Representative.
Source: Supply Chain Dive