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The high freight rates cannot hide the fact that U.S. imports have fallen sharply

According to a report from Lloyd’s List, the loading and imports of the three major container terminals on the west coast of the United States fell by 7% in June, and there is little sign that freight demand is expected to recover.

The container terminals in Los Angeles, Long Beach and Oakland have reduced the number of imported TEUs by more than 56,000 TEU in 2020 compared to the same period of the previous year. This is due to the continued adverse effects on carriers and terminals due to the impact of the new crown epidemic.
In fact, only the Oakland Terminal managed to achieve a small increase of 1.9%, but the sharp decline of its Southern California rival offset this increase, adding only 1,500 teu that month. The decline in the number of exports and empty containers means that the total throughput of the Auckland terminal remains negative, down 2.3% year-on-year.

Although the combined throughput of these three ports increased by 8.5% compared to May's throughput, it is still far below the expected level (the same period in previous years), because container liner shipping will enter the traditional peak season in the third quarter.

Mario Cordero, Executive Director of the Port of Long Beach, said: “Due to the new crown epidemic, the voyage of ultra-large container ships has been adapted to the decline in import demand, and the situation of large-scale suspensions continued to increase in the second quarter.”

With the arrival of the traditional peak season in the third quarter, the suspension of flights is expected to slow down.

Gene Seroka, Executive Director of Los Angeles Terminals, said: "In view of the unresolved trade frictions and the ongoing COVID-19, our freight volume in the first half of the year is in line with our forecast."

Lloyd’s List pointed out that despite the hint that potential demand is increasing, these figures indicate that trans-Pacific trade has not immediately resumed trading volumes.

"Although the recent weeks are indeed encouraging, the next few quarters may face challenges, and different participants will adopt different approaches. Container shipping companies will definitely transport more containers than in the first half of this year. , But the cost of doing so may be higher because freight rates are unlikely to shrink significantly, but it is also conceivable that the current trans-Pacific trade is reversing." An industry analyst said.

As carriers withdrew capacity from the market, spot freight rates on major routes are still 30% higher than last year.

MSI said: "Although the annual capacity of most industries is still low, the three alliances have removed some capacity restrictions, overestimating the need for air freight in the latter part of the second quarter. If the major economies can avoid further blockades in the second half of the year, Then the contraction of container trade will be less than the previous forecast of 7%-10%, but it will still be highly uncertain. Because the recent rebound in inventory may be driven by one-time inventory replenishment momentum, and there are signs that, especially the US economy The recovery is slowing down."

According to the shipping network, the reason for the increase in freight rates despite the large-scale suspension of shipping is based on the "tacit understanding" and "self-discipline" between the three major alliances, the low fuel prices and the improvement of the carrier's market position during the epidemic. , Making the elasticity of freight far higher than the elasticity of cargo volume.