Container imports are flowing back into the U.S. after a six-month hiatus, with U.S. retailers knocked back by pandemic-driven lockdowns now stocking up before the holiday season. The demand is filling up container ships across the Pacific, and operators are restoring cargo-vessel sailings that were cut by as much as a third at the height of the pandemic closures from March to June.
Vessel bookings for the coming weeks suggest “September will be strong as well,” he said. “Retailers are currently restocking and redeveloping their inventories at their distribution centers and on their store shelves.”
The Port of Los Angeles said dockworkers there were handling 15 container ships on Thursday. In the spring, the average daily number of ships was about half that amount. “Capacity from Asia to the U.S. West Coast is 25% higher than it was in May and around 7% on the year,” said Jonathan Roach, a shipping analyst at London-based Braemar ACM Shipbroking. “We have seen a surge in short-term demand out of America.”
The rebound in demand has pushed up freight rates. The spot price to send a standard container from Shanghai to California this week reached $3,758, a record price that has more than doubled from the start of this year, according to the Shanghai Containerized Freight Index. The rate from China to the U.S. East Coast hit $4,538, the highest level since March 2015, and up 77% from the beginning of 2020.
The surge comes as retailers and manufacturers look to get goods in place for what they hope is a stronger fourth quarter and holiday sales season. Several merchants say they were hurt by stock shortages as states across the U.S. emerged from lockdowns over the summer.
Container volumes at the ports of Los Angeles and Long Beach rose by 24% and 21%, respectively, in July from June. Business at both ports had fallen by more than 6% in the first half of the year from the comparable period of 2019.
“The biggest pressure is on the West Coast, being the fastest way to get goods from Asia and get them onto the U.S. shop shelves,” said Nils Haupt, a spokesman for the German shipping line Hapag-Lloyd AG. “All available capacity has now been deployed as retailers scramble to restock, and this is driving the strong freight rates.”
