SIMIC

Shipping demand across the US is falling, freight rates are sliding, and ocean carriers to reduce capacity amid concerns a deeper coming downturn.

The rapid reversal in a freight market that was booming earlier in the year, when tight capacity and rising shipping prices brought big profits. Operators are set to begin reporting results based on growth that is already showing signs of slowing down.

Trucking bellwether JB Hunt has reported that revenue remained flat in the third quarter compared with the prior quarter at US$3.84 billion and that the company anticipates a weakened peak season.

"The growth in US import volume has run out of steam, especially for cargo from Asia," said Ben Hackett, founder of Hackett Associates and the author of the Global Port Tracker report issued by the National Retail Federation. "Recent cuts in carrier shipping capacity reflect falling demand for merchandise from well-stocked retailers, even as consumers continue to spend."

The NRF report is one of several measures showing shipping volumes slowing sharply from August to September, signaling waning demand rippling through supply chains even as retailers are lining up goods for the traditional sales season.

The Global Port Tracker report projects that imports into major US seaports will be down four per cent in the second half of the year after expanding 5.5 per cent year on year in the first six months of 2022.

Descartes Datamyne, a data analysis group owned by supply-chain software company Descartes Systems, suggests an even steeper decline based on its tracking of inbound trade volumes.

Their report earlier this month said September container imports, measured in TEU, were down 11 per cent year on year and were off 12.4 per cent from August, an unusually sharp falloff in the months considered the height of the peak season. Container imports from China, where manufacturers of goods including furniture, toys and electronics stuff boxes bound for US retailers, tumbled 18.3 per cent from August to September.

Many retailers pulled peak season orders in early this year to avoid a repeat of 2021 when supply-chain congestion caused delays and product shortages during the holidays. Many merchants now are coping with overstuffed warehouses after consumers shifted their spending from household goods, electronics and furniture to travel and dining out.