NRF imports and future SCFI forecast for container ships

 Let's take a look at the future direction of container shipping rates(SCFI) based on the import volume forecast announced by the NRF.

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1. Monthly U.S. Retail Import Volume Trend

•  US ports covered by Global Port Tracker handled 2.34 million TEUs in March. This was an increase of 10.8% from February and a 3.2% increase from the previous year. In addition, it surpassed the record of container volume (2.33M TEU) in May 2021, which was the highest import per month since the NRF started tracking imports in 2002. The port has not yet reported April numbers, but Global Port Tracker expects a very high level of 2.27M Teu.
•  June 2022 is expected to reach 2.29 million TEU, an increase of 6.6% from last year. July is expected to reach 2.31 million TEU, an increase of 5.3% from the previous year, August is expected to increase by 0.9% to 2.29 million TEU, and September is expected to increase 0.3% to 2.15 million TEU.

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2. Yearly U.S. Retail Import Volume Trend

 

•  Looking at the graph above, it can be seen that, except for the global financial crisis (2009), the volume of U.S. retail imports continues to increase. In particular, despite the covid-19 (2020) crisis, it can be seen that the cargo volume has rather increased compared to 2019 due to China's rapid blockade and the US' active response.
•  In the first six months of 2022, it is expected to total 13.5 million TEU, an increase of 5.1% over the previous year. Total imports in 2021 totaled 25.8 million TEU, an increase of 17.4% from the annual record of 22 million TEU in 2020.

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3. Analysis of the relationship between SCFI index and import trade volume

• The table above shows the US retail import volume by year, the SCFI Composite Index, and the freight rates by SCFI route (US West Coast/East Coast). It seems that the relationship between US West Coast (WC) freight rates and retail import volume is higher than the composite index, so we looked for a correlation. According to the analysis result, the US retail import volume and SCFI Composite Index were 0.494, the highest with the US West Coast freight rate at 0.567, and it was found that they had a high correlation with the US East Coast freight rate at 0.546.
• In summary, 1) trade volume increases due to securing pre-stock prior to price increase due to inflation 2) US retail import volume in 2022 is expected to exceed the peak in 2021 due to concerns about severe supply chain imbalance expected after the lockdown in Shanghai, China. And as the analysis result shows a high correlation, it is expected that SCFI freight rates will rebound mainly in the West Coast and East Coast of the US in the second half of 2022, thereby enjoying more of the shipping side market. Based on these points, investment by container shipping companies is highly recommended.

 

Thanks.