In the world of shipping, I often remark on how volatile the market can be and can change on a dime. Nothing states that more than the turnaround on overseas shipping into the United States. In the last 18 months, shipping containers were stacked in US ports because of very few exports, but imports were still in high demand, causing a soar in pricing.
Container import prices from China, for example, rose from $5000 to $30,000 or more. The steamship lines' reluctance to send empty containers back to China was compounding the problem.
As our imports peaked, warehouses became full, and consumer demand dramatically fell, suddenly causing the rates to plummet.
Pricing now is well below $5000 as exporters to the US are seeking US customer demand that is simply not there. Also, steamship lines will sail to multiple destination ports because of a lack of capacity to go direct to one location. Also, most do not want to sail a ship that is below peak capacity, so the model is slowing trade even more.
Hopefully, as the holiday season passes and US inventory starts to recede slowly, the trade balance could start to recover.
Also impacted by this current import/export situation is the trucking capacity.
Carriers do not want to take freight to the west coast as backhauls out of California have dwindled due to the freight shortages from lack of imports. Add the high fuel cost, and you will find most carriers domiciled in the central and eastern portions of the country simply do not want to go to the west coast.
Let's give it a few months, and let's see what’s on the horizon. We are all holding our breath that 2023 will be better.
Comments