As we near the end of the traditional peak season, the spot rate declines over the past 2 weeks are a very clear indicator that the peak season did not really materialize. Further to that, there are dark clouds looming over the horizon for the Transpacific trade, in part linked to US consumer behavior.
Changing Consumer Behavior
One element is the change in consumer behavior we saw during the pandemic (from services to goods), which is very likely to change back and have a negative impact on import volumes. Digging deeper, we see that in recent months, the growth is concentrated on goods which are not predominantly moving in containers. This data comes from the US BEA (Bureau of Economic Analysis).
Container Shipping Affected
As we can see in the above figure, the largest increase is for recreational goods and services, from 12% of the consumption in 2019 to 17.2% by July 2023. Diving deeper, we see that the largest growth within this category is exhibited by ‘Video, Audio, Photographic, Information Processing Equipment, and Media’. Going a step further, the ‘Information Processing Equipment’ is genuinely growing fast mid-2023. The main driver of strong growth within this category is clearly seen to be Computer Software and Accessories; and software is mainly not moving in containers, which means that this strong boost to consumer spending does not benefit container shipping lines.
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Source: Seaintelligence
