Import Cargo Growth Anticipated to Continue

“Imports will surge on both coasts, causing more backlogs as the U.S. economy is anticipated to improve,” stated Jonathan Gold, National Retail Federation (NRF) in March 2021. “The NRF has forecasted the sales growth in 2021 could turn out to be a record.” During a monetary policy meeting in March 2021, the Federal Reserve upgraded the economic growth outlook from 4.2% to 6.5% for Q4 2021. Unemployment is also projected to dip to 4.5% and inflation will rise to 2.4% by the end of the year. These projections are largely based on containment of the COVID-19 virus and continued vaccination to achieve “herd immunization” protected status.

Ocean Freight:
Moving cargo continues to be a challenge with no relief expected in the immediate future. Current market conditions from Asia are anticipated to worsen over the next 6-8 weeks. Even once carriers can get back on schedule, getting space is predicted to remain an issue into next year. From Europe, space continues to be tight and vessels are fully booked 30 days in advance with rates doubling in the past two months. The companies signing fixed rate contracts may not get the fixed rate space allotment until June. Space may become available in June, but it is anticipated to be tight until year’s end.

The West Coast, East Coast, and Gulf Ports remain backlogged. Congestion spread from the West Coast to the other coasts, and some increased delays were attributable to the six day closure of the Suez Canal as vessels diverted around the Cape which added to the delay. Congestion at the two largest ports of Los Angeles and Long Beach is expected to be reduced by June 2021, or in time for the anticipated “peak season,” usually in August. ILWU and ILU workers have been largely vaccinated to protect them from COVID-19 and have been working hard to manage the more than double surge of imports that most U.S. ports experienced in the 1st quarter of 2021. The second quarter growth of cargo is anticipated to continue.

Truckers are waiting for hours to pick up or drop off cargo at congested terminals and have been turned away due to equipment shortages or by terminals that have run out of loading time. Additional trucker fees are being applied on a regular basis.

Airfreight:
The air cargo transport industry has also been impacted. The rates have been increasing and cargo terminals are backlogged waiting for available cargo hold space. The inflated freight rates from Asia are expected to last through the end of the year and possibly until Chinese New Year 2022.

Please contact your Western Overseas representative if you have any questions.