Container Imports Ticked Up in May

Trans-Pacific container traffic showed an unexpected uptick in May which could be good news for intermodal traffic.

However, it is unclear what prompted the increase although there are a number of theories as to what prompted it.

The uptick came after container traffic plunged in late March and throughout April amid an economic downturn linked to the COVID-19 pandemic.

But now shipping companies are reinstating canceled sailing from China and are adding extra sailings.

During the depths of the pandemic, shipping lines had canceled 20 percent of sailings of container ships between China and the United States.

One theory for the uptick is that shippers canceled too many sailing after overestimating the near-term demand declines stemming from stay at home orders issued in numerous states.

Another theory is that consumer demand is stronger than predicted after states began relaxing and removing stay at home orders and allowed businesses and other activities to reopen.

Yet a third theory is that buyers of imported goods anticipate the collapse of a U.S.-China trade deal that could lead to new tariffs imposed by both countries.

At other times during the global trade war importers have ramped up buying in advance of tariffs and the same might be playing out now.

The e-newsletter FreightWaves repoprted market watchers saying this moving orders forward behavior is still being tempered by reduced demand due to the economic downturn.

Some observers have theorized that the upturn in shipping is temporary and will fall in early summer.

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