US container imports expected to fall as freight rates hit multi-year lows

North American container imports are expected to drop to their lowest level since early 2021, maritime consultancy Hackett Associates said, as weakening demand drives freight rates lower.

While twenty-foot equivalent unit imports are still up a healthy 3.6% in the first eight months of 2022, Hackett's forecast projects a 2.9 decrease for the second half of 2022, with that number projected to fall 9.6% in H1 2023.

"The growth in US import volume has run out of steam, especially for cargo from Asia," said Ben Hackett, partner at Hackett Associates. "The declining demand is forcing significant cuts in ship capacity being offered by carriers, and the historical peak season increase in shipments has not appeared, adding to the woes of carriers."

Freight rates have continued to descend as liners attempt to maintain healthy vessel utilization in a slowing market to sustain market share.

Platts, part of S&P Global Commodity Insights, assessed the key Far East-US Pacific Coast trade route at $2,000/FEU Oct. 10, down 52.3% on the month and at the lowest value since May 29, 2020.

S&P Global projects rates on the Platts Container Rate 13 -- North Asia-to-West Coast North America -- route to slide further in the fourth quarter and into the new year before leveling out in February. North Asia to US West Coast rates for October-January are projected to reduce by an average 9% per month and settle at a low of $1,500/FEU in January before rebounding to an average $1,650/FEU in Q2 2023.

USEC ports show strength

US Atlantic Coast ports outperformed those on the Pacific Coast during August, when combined loaded import volumes fell 8.7% month on month to 1.21 million TEU. US East Coast ports notched 106,000 TEU of additional imports during the period, a 9.9% increase on the year.

"Right now, our focus is: let's make sure we're not bringing in more than our inventory levels require," a US-based importer said. "We're probably going to see lower levels of volume across the board in the industry, but not nearly as low as they were when the pandemic hit."