Rate Respite
India-US shippers are finally catching some relief as cargo contract rates have noticeably cooled in August.
Booking rates to the US East Coast (New York) have seen a 5 percent decline on average. The decrease has been even steeper — about 18 percent — for trade to the US West Coast. Recent trade data suggests a slowing of Indian exports — edging down nearly 1 percent year over year last month.
So what’s causing the drop in rates? Well, there are 3 factors which have contributed to decline: high global inventory levels, a demand shift toward services, and recessionary conditions unfolding in some major markets.
While the prices aren’t expected to collapse any time soon, this softening offers some relief from the price hikes seen over the last 2 years.
Source: JOC
Staying Strong?
So you keep hearing that people are slowing down on their purchasing and are spending more on services… But, what’s actually going on?
It’s in the Numbers
Take the LA port, for example. Incoming container cargo rose to the most on record for the month of July, indicating that retailers and manufacturers were still replenishing inventories heading into the second half of the year.
The Southern California port handled an estimated 485,472 million 20-foot-equivalent units last month, a 3.4% increase from the same month last year, according to preliminary figures released on Wednesday. Total cargo handled by the port reached 6.35 million containers in the first seven months of the year, up by a modest 0.5% from the year-earlier period.
In the neighboring Port of Long Beach, inbound shipments for July were down 1.8% from a year earlier, according to data released this week.
Meanwhile, California’s third-busiest port in Oakland shut down for almost a week last month after truckers protesting a gig-work law that could take 70,000 California drivers off the road blocked access to the operation. Although activities have fully resumed, Oakland handled 27% fewer loaded inbound containers last month compared to June and the prior year. The port expects an uptick in imports in the upcoming months as delayed vessels make their way to the San Francisco Bay.
Mixed Messages
West Coast ports are registering an earlier-than-normal peak season this summer as many retailers try to avoid last year’s experience, when they struggled to secure their goods, from clothing to electronics, because of serious shipping delays. Since then, supply chain bottlenecks on the docks have significantly cleared up.
But at the same time, there are mixed signals as to what the US demand is.
Source: AJOT