With the prolonged war between the US and Iran, energy prices are rising and consumer sentiment is shrinking, leading to an analysis that US import volumes will significantly decrease. For Busan Port, the US is the second-largest trading partner after China, so the industry is closely watching the changes and impact of US-origin cargo volumes.
The Korea Maritime Institute (KMI) analyzed on the 31st in its recently published 'International Logistics Weekly No. 791' that "due to the expansion of Middle East risks, oil price increases and consumption contraction have caused US retail industry's inventory strategies to become more conservative, leading to a forecast of decreased import volumes in the second half of the year."
Typically, the peak season for the shipping market is recognized as July to October, before Thanksgiving and Christmas in the US, which ranks first in merchandise imports. This is because goods to be sold during the year-end shopping season and large events must be shipped several months in advance to ensure they arrive safely in the US.
The report also expressed concern about severe consumption contraction, noting that the University of Michigan Consumer Sentiment Index (MCSI) fell to an all-time low of 48.2 in May. The MCSI is a leading economic indicator in the US; usually, a score above 100 indicates consumers view the economy positively, while below 100 indicates pessimism.
The prolonged blockade of the Strait of Hormuz has raised concerns about global oil supply disruptions, leading to rising international oil prices and fuel costs, which in turn have pushed up US gasoline prices and inflationary pressures, causing the MCSI to drop to its lowest ever. The report also explains that as geopolitical instability continues along with consumption contraction, US retail distributors are taking a very conservative approach to inventory buildup for the peak season.
A KMI official said, "Following last year, the prevailing forecast this year is that it is difficult to expect a clear peak season effect," adding, "The US import market is being more significantly affected by geopolitical variables and consumption contraction than by traditional seasonal patterns."
Accordingly, container import volume at major US ports in July, when the shipping peak season begins, is expected to be 2.2 million TEU, down about 8% year-on-year. The National Retail Federation (NRF) projected a slight increase in US import volumes in May and June compared to the previous year, but the report analyzed that this is largely due to a base effect from the sharp drop in imports following the introduction of additional US tariffs last year. Furthermore, August volumes are also forecast to decline by 5.5% to 2.19 million TEU, and September, considered the peak of the season, is also expected to see a decrease.
However, some analysis suggests that current inventory levels at US wholesalers are declining, and the desire to secure goods in advance to avoid additional tariffs could boost US import volumes. Indeed, bookings for ships heading to the US next month are full, and freight rates are rising.
Reporter Park Hye-rang rang@busan.com
