Import demand continues to fall• https://www.freightwaves.com by Zach Strickland
Average daily bookings for container imports were half of what they were in January of 2022 and 25% lower than pre-pandemic 2020. And while the Lunar New Year has depressed bookings over the past few weeks, there was little pre-holiday shipping buildup before the dead period. Should we feel optimistic that demand is normalizing?
The Inbound Ocean TEUs Volume Index (IOTI) measures twenty-foot equivalent unit (TEU) container volumes being booked for shipping by actual departure date from their ports of origin bound for the U.S. — effectively the furthest upstream view of finished goods in supply chains available in aggregate.
In May, this index predicted a huge drop-off in goods entering the country by declining 30% in a matter of weeks. The implication is that shippers realized they had too much stuff and nowhere to put it as consumer demand had eroded faster than expected.
Inventory correction has been the theme of this year's shipper-initiative playbook because of this. Retailers specifically have struggled with a glut of goods ordered during a period where supply chain congestion made it nearly impossible to receive their orders in a predictable manner, thanks to unexpected demand spikes resulting from the pandemic lifestyle.