No let-up in container import demand surge

Stress to transportation supply chains through end of summer

Compiled by Bruce Abbe, SSGA Strategic Advisor for Trade and Transportation

Inland U.S. ag container exporters are anxiously waiting for a breather from the disruptions caused by the demand surge for container–shipped import products that has led to limited access to containers for shipping food products to locations other than China. Indications now are signaling no let–up in the foreseeable future.    

According to research by Panjiva, U.S. seaborne imports of containerized freight increased by 50.5% year over year in March and by 36.9% when compared to March 2019, resulting in a record 3.02 million TEUs (20-foot-equivalent units) shipped, or 97,300 per day. Consumer demand continues to be the main driver of this growth. For instance, Panjiva reports leisure products and home furnishings climbed 94.9% and 91.4% this March compared to March 2019. 

Also: 

• In March, the always busy Port of Long Beach set an all–time record for the number of containers handled at its terminals. Long Beach reported 840,387 TEUs were handled in March, up from the previous record of 815,885 set in December. March is normally a slower month. For the first quarter of 2021, the Port of Long Beach handled 2.4 million TEUs. The total number of empty containers, including outbound empty containers (270,016 TEUs) also were all-time highs for the port, according to Freightwaves. On the east coast, the Port of Charleston, S.C., also reported record volume of containers in March.    
• Further, the National Retail Federation told the Journal of Commerce that its member retailers see no let-up in their ordering surge through the end of the summer. NRF projected imports to remain at record or near record levels through August.  That demand is reportedly being driven by the need to restore their inventories-to-sales ratio level that is near a 30-year low. The fall back-to-school and late fall/early winter holiday high demand seasons follow right behind. 
• The container shortages felt throughout the global system took a further jolt from the recent six-day blockage of the Suez Canal. Ocean carriers reportedly warned that there will be a deeper shortage of containers available in China, particularly 40-foot units, in the coming weeks. Those shortages could further spike spot rates in China for its export manufactured goods heading to the West.  

Industry experts, including SSGA logistics members, say these projected trends, coupled with current pandemic-driven constraints and backlogs on the ocean/ports/rail systems, could last throughout much of the rest of the year. Exporters will need to continue to explore all creative options for accessing containers and ship space.