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Trillion-dollar savings set to boost US import boom

America’s National Retail Federation (NRF) believes that US consumers have US$1 trillion in savings and credit and that they are ready and willing to boost the economy ahead of the Christmas rush.

Expectations from Deloitte, Forrester Research and the NRF, are that whether there is a second stimulus package from government or not US consumers have saved their cash and have credit that will see the container volumes on the Pacific hold up until January.

According to consultant Jon Monroe, “Target Stores seems to be ahead of the curve for this year’s shopping, hosting their “Deal Days” on 13 and 14 October at the same time as Amazon Prime Days. Add to this holiday enthusiasm, the fact that a number of companies are advancing bookings to get product to the US before the end of November when their tariff exclusions expire and we will have a tight booking window in Asia for the next 5 weeks at a minimum.”

Pressure on the supply chain out of Asia is being added by the cyber attack on CMA CGM, said Monroe, with the carrier forced to manually book cargo, causing a further backlog of freight in Asia, and that cargo may mean that volumes will be high through to Chinese New Year, which will start on 12 February 2021.

Target Stores is starting its sales early and has turned many of its retail outlets into fulfilment centres, according to Monroe, in an effort to compete with Amazon, but also to meet the rising demand for digital sales, expected to be 30-35% of this year’s holiday spending.

While the eastern end of the Pacific trades is anticipating a spree, the Asian exporters are grappling with supply chain issues. No bookings will be placed until the end of Golden Week, on 16 October, but there were no blank sailings and according to Monroe, five extra vessels were deployed on the trades.

Vessel space is expected to remain tight, “As companies move to get product into the US in time for the early shopping season and to beat the tariff exclusion expirations,” explained Monroe.

As the vessels arrive in the US next week the expectation is that terminal congestion will be at its worst and Monroe believes that the only solution is prepare now. “I am already seeing companies looking for draymen on LinkedIn,” he said.

Non-Vessel-Operating Common Carriers (NVOCC) have had a good year and the expectation is that they will continue to see bookings beyond Golden Week as companies look to replenish stocks in readiness for the buying season.

In Asia, however, there is a shortage of equipment with the Container xChange seeing massive increases in demand for used boxes over the past few months.

“On average, used standard containers (20’, 40’ and 40’ high cubes) manufactured between 2000 and 2005 cost US$1,744 across all Chinese ports with peaks in the last couple of weeks,” Container xChange said.

Neither does the company foresee the shortages of equipment in Asia improving soon, the lines have reduced free time to help expedite cargo.

“Carriers are now cutting back on additional free days of usually 20 days or more for large retailers while keeping the free storage time of three days,” added Container xChange.

The company added that box availability is falling in Asia, while dwell times in US ports is increasing. That has seen a 156% increase in the availability of 20’ containers in Los Angeles according to the Container xChanges’ availability index, CAx.

Availability at the Port of Qingdao, for 20’, 40’, and 40’ high cube dry containers has seen an abrupt drop since week 36, falling from a value of 0.7 to 0.35 for a 20’ box. For a 40’ container, availability values dropped from 0.68 to 0.59 and for 40’ high cubes 0.66 to 0.44, in week 41, just five weeks later.

Meanwhile, in the US container availability has increased substantially, with the CAx rising from 0.11 to 0.57 within a few weeks for standard containers available in the Los Angeles region.

Nick Savvides
Managing Editor





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