Photo: Port of Los Angeles
By Jonathan Saul and Lisa Baertlein LONDON/LOS ANGELES, Oct 26 (Reuters) – Surging shipments into the United States are fueling record high freight costs and logjams at seaports, but transportation executives say the rally will lose steam with a second wave of COVID-19 restrictions on the cards.
Container shipping companies, which move goods for customers including Amazon.com and Walmart, got stung late last year and early this year when COVID-19 halted trade around the world, and they question whether the U.S. import boom can be sustained.
“Let’s not get carried away,” Rolf Habben Jansen, chief executive of Germany’s Hapag Lloyd, told reporters. “This is just a spike that no one has foreseen in an unusual period. There will be a correction to that.”
U.S. consumer confidence ticked up in September, when retail sales accelerated. Still, consumers are eating through savings, layoffs are mounting and the country just set a record for new COVID-19 infections.
“Everything depends on the demand and how the second wave of COVID affects the world economy,” Aristides Pittas, CEO of shipping company Euroseas, said at a Capital Link virtual event.
In recent weeks, the cost of transporting goods from Asia to the United States – one of the world’s biggest retail markets – topped $4,500 per 40-foot container unit (FEU), the highest recorded level, data from S&P Global Platts Containers showed.
“We are sold out. The ships are 100% full. The containers are 100% full. You can’t get a container,” Jeremy Nixon, CEO of Japanese container group Ocean Network Express (ONE), said at a recent International Chamber of Shipping virtual event.
Total imports to the 10 largest U.S. seaports increased 9.2% in August and 12.4% in September, trade data from Descartes Systems showed.
U.S. business inventories rebounded in August, as retailers and other companies raced to restock depleted warehouses and distribution centers.
“Inventories are still quite low and there’s a significant need to replenish them,” said LeAnne Coulter, vice president of freight management at Penske Logistics.
Data suggests that record volume at the Port of Los Angeles, the busiest U.S. ocean trade hub, could stretch through November. Meanwhile, it is causing backups that could ripple through the supply chain.
“This will probably taper off in the first or second week of December,” Port of Los Angeles Executive Director Gene Seroka said of the import rush.
(Reporting by Lisa Baertlein in Los Angeles and Jonathan Saul in London Editing by Marguerita Choy)
(c) Copyright Thomson Reuters 2020.
Join the gCaptain Club for curated content, insider opinions, and vibrant community discussions.
Join the 109,196 members that receive our newsletter.
Have a news tip? Let us know.
Leaders from a US dockworkers’ union and the group that represents their employers are set to resume contract talks on Jan. 7 as the threat of a strike looms, according to a person familiar with the negotiations.
The world’s No. 2 container carrier urged customers to remove cargo from East and Gulf Coast ports in the US before a Jan. 15 deadline for dockworkers and their employers to avoid a possible strike just days before President-elect Donald Trump takes office.
The Port of Shanghai has become first port in the world to handle over 50 million TEUs (twenty-foot equivalent units) in annual container throughput, Xinhua reported on Monday. The new...
Maritime and offshore news trusted by our 109,196 members delivered daily straight to your inbox.
Essential news coupled with the finest maritime content sourced from across the globe.
Sign Up
Join The Club
