Retailers are ramping up imports to the United States this summer, driven by concerns over potential port strikes and ongoing disruptions from attacks in the Red Sea. This proactive approach aims to ensure a smooth holiday shopping season despite a shorter peak period and ongoing uncertainties.
Container imports and freight rates saw significant increases in July, indicating an early peak for the ocean shipping industry, which handles approximately 80% of global trade. July is anticipated to be the high point for U.S. retailers, with August expected to be nearly as strong, according to analysts.
Retailers are pushing forward their holiday promotions to capture early shoppers, a strategy to avoid being caught off-guard. "Retailers don't want to be caught back-footed," said Jonathan Gold, the National Retail Federation's (NRF) vice president for supply chain and customs policy. Companies have even expedited holiday goods orders, with some Christmas items shipped as early as May, noted Peter Sand, chief analyst at pricing platform Xeneta.
This surge in imports is not driven by a boost in consumer spending, which remains constrained by persistent inflation and high interest rates. Instead, it is a precautionary measure against a potential U.S. port strike and the compressed holiday shopping season due to Thanksgiving's late date on Nov. 28.
In July, U.S. container imports reached the third-highest monthly volume on record, with 2.6 million 20-foot equivalent units (TEUs), marking a 16.8% increase from the previous year, largely due to record imports from China, according to Descartes Systems Group. The NRF, including top executives from Walmart, Target, Macy's, and Saks, anticipates strong import activity in August as well. Walmart, a major importer, will report its second-quarter earnings on Aug. 15.
Retailers are wary of a possible strike starting Oct. 1 at seaports from Maine to Texas, following stalled negotiations between the International Longshoremen's Association and the United States Maritime Alliance. Maersk has warned that even a brief work stoppage could lead to significant backlogs and delays, taking 4-6 weeks to recover from.
Non-contract spot rates for containers from the Far East to the U.S. West Coast surged 144% between late April and early July but have since dropped 17%, with similar trends observed for routes to the U.S. East Coast and Northern Europe, according to Xeneta. "We should now see the spot market fall further, but the decline is unlikely to be as rapid as the rise, so it is still going to be a painful end to the year for shippers," Sand said.
Additionally, the threat of new tariffs on exports from China and other countries is driving import growth. President Joe Biden’s administration has introduced new tariffs, effective later this year, with significant impact expected on goods like EV batteries and solar cells. Despite ongoing tariff threats and uncertainty, companies have largely responded with caution. "Where there seems to be agreement so far is that the United States and China have entered into a much more competitive relationship, and it will not matter whether one party or the other wins the election," Maersk CEO Vincent Clerc said.
(Source:www.reuters.com)
Container imports and freight rates saw significant increases in July, indicating an early peak for the ocean shipping industry, which handles approximately 80% of global trade. July is anticipated to be the high point for U.S. retailers, with August expected to be nearly as strong, according to analysts.
Retailers are pushing forward their holiday promotions to capture early shoppers, a strategy to avoid being caught off-guard. "Retailers don't want to be caught back-footed," said Jonathan Gold, the National Retail Federation's (NRF) vice president for supply chain and customs policy. Companies have even expedited holiday goods orders, with some Christmas items shipped as early as May, noted Peter Sand, chief analyst at pricing platform Xeneta.
This surge in imports is not driven by a boost in consumer spending, which remains constrained by persistent inflation and high interest rates. Instead, it is a precautionary measure against a potential U.S. port strike and the compressed holiday shopping season due to Thanksgiving's late date on Nov. 28.
In July, U.S. container imports reached the third-highest monthly volume on record, with 2.6 million 20-foot equivalent units (TEUs), marking a 16.8% increase from the previous year, largely due to record imports from China, according to Descartes Systems Group. The NRF, including top executives from Walmart, Target, Macy's, and Saks, anticipates strong import activity in August as well. Walmart, a major importer, will report its second-quarter earnings on Aug. 15.
Retailers are wary of a possible strike starting Oct. 1 at seaports from Maine to Texas, following stalled negotiations between the International Longshoremen's Association and the United States Maritime Alliance. Maersk has warned that even a brief work stoppage could lead to significant backlogs and delays, taking 4-6 weeks to recover from.
Non-contract spot rates for containers from the Far East to the U.S. West Coast surged 144% between late April and early July but have since dropped 17%, with similar trends observed for routes to the U.S. East Coast and Northern Europe, according to Xeneta. "We should now see the spot market fall further, but the decline is unlikely to be as rapid as the rise, so it is still going to be a painful end to the year for shippers," Sand said.
Additionally, the threat of new tariffs on exports from China and other countries is driving import growth. President Joe Biden’s administration has introduced new tariffs, effective later this year, with significant impact expected on goods like EV batteries and solar cells. Despite ongoing tariff threats and uncertainty, companies have largely responded with caution. "Where there seems to be agreement so far is that the United States and China have entered into a much more competitive relationship, and it will not matter whether one party or the other wins the election," Maersk CEO Vincent Clerc said.
(Source:www.reuters.com)