In the past three quarters of this year, the US line has shown a sluggish peak season and declining freight rates.
According to the latest relevant statistics, U.S. container imports reached 21.9 million standard units (TEU) in August, a year-on-year decrease of 12.6%. From January to August this year, the total volume of containers exported from Asia to the United States fell by 19.6% year-on-year in 2022.
Facing the last quarter, many people in the industry have a question: “Is there still a chance for the US line to be successful this year?”
Entering the fourth quarter, the United States will usher in the biggest consumption seasons such as Thanksgiving and Christmas holidays, and various financial reports show that the destocking progress of large U.S. trading department stores has basically been completed.
An American thread expert who has been engaged in freight forwarding in California for many years said in an interview that although the inventory is now lower than before the epidemic, he is not optimistic about the next sales season. The reason is that due to the lack of confidence in future consumption, major retailers lack Significant inventory replenishment motivation.
“I think we can’t wait for this year’s peak season, there’s no chance.” He explained, “Now, consumption in the United States is not spent on buying furniture, TVs, etc., but on travel expenses such as taking children. The unemployment rate in the United States is low, wages are rising, and travel costs in the United States are very high, so hotels have increased by at least 30%-40%.”
He said that currently, demand in the United States will basically continue the trend of 2019 in the next few months, and the volume curve in these months has highly overlapped with that of the same period in 2019.
However, what can be seen is that there are also some positive trends.
U.S. import data continues to decline
The latest data released by Descartes Datamyne, a US trade data service provider, shows that US container imports reached 21.9 million standard units (TEU) in August, a year-on-year decrease of 12.6%, but a month-on-month increase of 0.8%. Specifically, the exports of the 10 major economies in Asia were 1.55 million TEU, a year-on-year decrease of 13.1% and a month-on-month increase of 1.7%.
From January to August this year, the total container volume exported from Asia to the United States was 11.25 million TEU, a year-on-year decrease of 19.6% in 2022, but a slight increase compared with the same period before the epidemic in 2019.
In the data at the end of August, China exported 918,026 TEU containers to the United States, down 14.4% year-on-year; South Korea exported 155,057 TEU, down 14.9%; Vietnam exported 148,220 TEU, down 10.3%; but containers from Japan were 32,664 TEU, soaring 11.6%.
Experts analyzed that demand in the United States has indeed decreased, and this is a common problem. However, in terms of data, there are certain problems compared with the same period last year.
“In 2022, U.S. container imports started to hit the brakes in May last year, but the real decline was after August last year.” He explained, that is to say, U.S. imports from January to August last year were still very high because they had not yet entered the market. The stage of destocking. At present, the demand in the United States in the next few months will basically continue the trend of 2019. The volume curve in these months has highly overlapped with that of the same period in 2019.
Analysts believe that by observing the monthly data released by the U.S. Department of Commerce, we can see that the real reason for the decline in U.S. demand is changes in U.S. consumption habits. Data from the U.S. Department of Commerce shows that although there is still a decline compared with the same period last year, the decline in total retail sales is not obvious.
“During the epidemic, everyone could only spend money to buy goods, but not services. But now, normal consumption in the United States is dominated by the service industry, including catering and tourism. Especially in the summer, vacation has become a necessity. At the same time, the cost of travel in the United States, That is to say, air tickets and hotels are very expensive, and consumption is transferred to this part, and less money is spent on buying things.” Roger explained.
However, on the one hand, the total demand in the United States is declining; on the other hand, we must also see that there has been a certain shift in goods in exporting countries.
From January to August, the United States imported 18% fewer shipping containers from around the world, while the United States also reduced its imports from Vietnam by 23%. “Vietnam’s largest export category to the United States is furniture, accounting for about 40%. In the past two years, the largest decline in U.S. imports has been furniture, because American consumers bought everything they should buy during the epidemic, and also replaced what they should replace. It will not be updated immediately, so U.S. furniture sales have been falling, which is why Vietnam’s exports have been severely hurt.” At the same time, “In the same period, the volume of containers from India to the United States decreased by 13%. This means that U.S. demand has decreased, Basically no exporter is immune.”
New trends in exports to the United States
September is usually the peak season, but September this year was surprisingly dull.
According to industry experts, large U.S. trade department stores have basically completed destocking.
“For example, according to Macy’s latest financial report, inventory in the second quarter of this year was 10% less than last year and 18% less than the second quarter of 2019.” Roger said, “In other words, the current situation is no longer simply destocking, but It is lower than the normal level. However, these department stores will not frantically replenish inventory because they are not optimistic about the full-year sales. In June this year, Macy’s lowered its overall expected sales this year and maintained it in its latest financial report Based on this judgment, it is expected that the sales volume for the whole year will drop by 6%-7.5% compared with last year.”
At the same time, we must also see that food prices in the United States have been rising.
“Eating out is even more exaggerated. The prices have risen and have not come down yet. For example, the tip has also increased to 20%. These prices have not come down yet.It’s all expenses. “If personal wages do not increase at such a high rate, then most of the wages will be spent on daily consumption, and people will naturally not spend extra money to buy the goods they purchased in 2021.” Consumers are budget-conscious, and this reason is also affecting U.S. imports. ”
Industry experts predict, “This year’s Christmas season will be the same as last year. You still have to buy holiday gifts, but it won’t be so crazy. Maybe people will buy them early when they see discount sales in October.”
Looking at the goods sold by China to the United States, he said that currently in terms of sales volume, the three major categories of furniture, electrical appliances and home appliances account for a high proportion of container volume, but the sales of these three categories have also been increasing year-on-year. Decline, because these three categories happened to be the best-selling ones during the epidemic, and now people have no demand for replacement for the time being.
“Currently, the best sellers are small things like beauty products,” he added.
Another industry insider said, “Large European and American purchasers/groups have been affected by the political pressure of trade decoupling and have taken the initiative to reduce their share of Chinese purchases in the next two years, but overseas small and medium-sized enterprise purchasers are going against the trend.”
Data shows that from January to July this year, a certain cross-border e-commerce website’s small order trade volume with the United States still maintained a high double-digit growth rate.
At the same time, “traditional exports such as OEM/ODM have a greater impact, but the industrial belt with Made in China/white label attributes, such as small commodities/daily necessities, has grown significantly. We have seen that the Yiwu market’s exports to the United States grew by more than 70% from January to July. “He said, “There are currently a large number of Chinese businesses that specialize in production and research and development, with high-quality products and superior performance. These manufacturers have moved from a single order-taking production model to a multi-model overseas business, driving sales through product power and combining social media. /Live broadcast/Short video and other multi-channel methods enable brands to go global.”
In addition, from an industry perspective, “the cross-border B2C fully managed model has developed rapidly, connecting industrial belts/factory supply, shortening links and efficiently serving overseas consumers, meeting consumption downgrade needs, and driving up the demand for cross-border e-commerce logistics and transportation.”