This is the biggest hope of the US shipping market in 2023
The real hope of the US shipping market may be in the third quarter. Ushering in a normal peak season in 2023 is already the biggest luxury. There is no doubt that January 2023 is the worst January for exports from Asia to the United States in the past five years. Not only can it not be compared with 2022 and 2021, it even fell by 2% compared with the same period in 2019.
New Year’s volume fell sharply
According to statistics from Descartes Datamyne, a US trade data service provider, in January 2023, the export volume from Asia to the United States was 1.504 million TEUs, a sharp decline compared with the same period in 2021 and 2022. Under normal circumstances, the annual shipments before the Lunar New Year are closely related to the time of the Chinese New Year. The Spring Festival in 2022 is about a week later than in 2023, so from the perspective of shipment, it can be roughly considered that 2022 and 2023 are the same. However, there is another variable in 2023, and that is the impact of Covid-19. If it is said that in January 2023, the export volume from Asia to the United States can barely maintain the level of 2019, then the export situation from China to the United States is even less optimistic. Compared with January 2019, the volume of Chinese exports to the United States in January 2023 decreased by 14%.
The inventory-to-sales ratio of the retail industry tends to be normal
The United States Census Bureau released a monthly report on U.S. retail sales, showing that in December 2022, U.S. retail sales fell by 1.2% month-on-month and increased by 5.2% year-on-year. A slight year-on-year decrease is expected. With the promotion of merchants in advance, consumers have become accustomed to buying holiday goods as early as October and November 2022. November is the peak of retail sales, and December has dropped slightly.
In terms of specific categories, consumer demand for furniture and household products continued to slow down; electronic and electrical products fell slightly month-on-month, down 5.6% year-on-year; building materials products maintained positive growth year-on-year and month-on-month; consumption of food and beverage products has been relatively stable. The consumption of department store products decreased slightly from the previous month and rose slightly from the same period last year. Judging from the data from October to December 2022, the entire Christmas sales season is basically in line with expectations. Due to the serious lag in the data on the inventory-to-sales ratio, the latest data released by USCB is from November 2022.
It can be seen from this data that the overall inventory-to-sales ratio of the U.S. retail industry in November 2022 is 1.24, a slight increase from 1.22 in October 2022, and much higher than the 1.10 in November 2021. In terms of specific categories, the inventory sales of automobiles and auto parts products increased both month-on-month and year-on-year, and the consumption of auto parts products finally cooled down. Furniture, electrical appliances, and home appliances remained unchanged from the previous month but were still much higher year-on-year. Food products have remained stable without significant fluctuations. Clothing products have risen slightly month-on-month.
Will there be a wave of shipments?
No one can accurately answer what the normal after Covid-19 will be. But there is a consensus that the normal is not simply the same as before the Covod-19, because many variables have changed, such as high inflation, economic recession, the war between Russia and Ukraine, and so on. The good news is that after more than half a year, the inventory-to-sales ratio of certain categories of products is even lower than the level before Covid-19 in the same period. In January 2023, due to the stimulus of shipments before the Lunar New Year, the volume of goods finally rebounded, an increase of 9.6% compared with December 2022.
It is expected that the data in February 2023 will be slightly better than that in January, and March may be the lowest month in 2023 because a large number of empty ships after the festival will lead to a sharp drop in shipping capacity. The second quarter of the past three years has not been normal. The second quarter of 2023 may be a normal quarter, without the pull of holiday consumption, and the volume of goods will be neither high nor low. The real hope is still in the third quarter of 2023. After the inventory-to-sales ratio has dropped to a normal level, if retailers and wholesalers are optimistic about the US economy and consumption prospects, they may restock for the Christmas sales season in the third quarter and usher in a normal peak season, which may already be the biggest hope.
