- Global demand for ocean shipping on East/West lanes will be nearly on par with 2019, projected to fall just 0.1% in the third quarter compared to the third quarter of 2019, Sea-Intelligence said, based on currently scheduled blank sailings from carriers.
- "While volumes are still looking to decline in July year-over-year, we are looking at a prospective Y/Y growth in August and September," Sea-Intelligence CEO Alan Murphy said in a release.
- Growth in August and September might seem implausible given the ongoing pandemic and economic downturn, but lockdowns and working from home have created a demand for more consumer products, including home office furniture, that will bolster imports through the fall, Murphy said.
Carriers have added capacity back into the market, but they admit their clarity on upcoming demand from shippers is limited.
"Our visibility is not fantastic," Maersk CEO Søren Skou said on the company's earnings call earlier this month.
Skou's reasoning for volume upticks in the U.S. was in line with Murphy's: Consumers were spending more on goods at a time when spending on services is not an option.
"April was the worst month with ocean volumes being down 20%," Skou said. "Volumes have sequentially improved since then. And we are now in August in mid- to high single digits down year-on-year."
The August demand has pushed rates up for shippers as capacity had to catch up to demand. Rates from China to the North American West Coast are up nearly 47% year over year, according to Freightos.
Still, a turnaround in the second half of the year will need to be fairly dramatic to offset what the economy has undergone since March. In July, the Port of Los Angeles forecast its volume for 2020 would be the lowest its been since the Great Recession.
A forecast released earlier this summer from the Global Port Tracker published by the National Retail Federation and Hackett Associates showed October as the busiest month of peak season, with 1.7 million TEUs expected to be handled (an almost 10% YoY drop).
But ports across the country have noted a "stabilization in volumes" over the last couple of months. And a new forecast from the same group shows they don't expect any month to exceed the volume seen in August.
"We’ve probably already had our busiest month," Hackett Associates Founder Ben Hackett said in a statement. "And with the pandemic taking a hit on the economy ever since then, peak season is likely to be a disappointment by comparison."