Shipping companies expect U.S. import binge to lose steam
Surging shipments into the United States are fueling record high freight costs and logjams at seaports, but transportation executives say the rally will lose steam with a second wave of Covid-19 restrictions on the cards, news agency Reuters reports.
Container shipping companies got stung late last year and early this year when the pandemic halted trade around the world, and they question whether the U.S. import boom can be sustained.
"Let's not get carried away," Rolf Habben Jansen, chief executive of Germany's Hapag Lloyd, was quoted as telling reporters. "This is just a spike that no one has foreseen in an unusual period. There will be a correction to that."
U.S. consumer confidence ticked up in September, when retail sales accelerated. Still, consumers are eating through savings, layoffs are mounting and the country just set a record for new COVID-19 infections.
"Everything depends on the demand and how the second wave of COVID affects the world economy," Aristides Pittas, CEO of shipping company Euroseas, said at a Capital Link virtual event.
In recent weeks, the cost of transporting goods from Asia to the United States - one of the world’s biggest retail markets – topped $4,500 per 40-foot container unit (FEU), the highest recorded level, data from S&P Global Platts Containers showed.
“We are sold out. The ships are 100% full. The containers are 100% full. You can’t get a container,” Jeremy Nixon, CEO of Japanese container group Ocean Network Express (ONE), said at a recent International Chamber of Shipping virtual event.