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Mounting Evidence that U.S. Import Volumes to Remain Strong
Contrary to recent news headlines, port volumes increase and are speculated to continue. We’ve all seen the clickbait titles stating “U.S. Import Demand is Dropping off a Cliff (June 7, 2022)” or even “U.S. Retail Cargo Seen Cooling in Second Half as Inflation, Rates Bite (August 8, 2022)”. But is there any truth to these reader-inducing headlines? Not really – While there is no doubt that economic growth in the U.S. has slowed substantially from the breakneck pace experienced last year, a closer look at the subcomponents for GDP suggests that domestic and international transportation providers can expect demand to hold strong through the remainder of 2022. Here’s what our team found after scouring the web to find factual metrics from reliable sources:
Despite the dollar being incredibly strong relative to other currencies, US exports increased 3.7 percent between the first and second quarters of 2022. On a non-seasonally adjusted basis, this increase was larger, at 5.1 percent. This suggests demand for American products despite the higher costs other nations are paying for them. Supporting article.
Descartes Systems Group (Nasdaq: DSGX) (TSX:DSG), the global leader in uniting logistics-intensive businesses in commerce, released its July 2022 report on the ongoing global shipping crisis and analysis for logistics and supply chain professionals. The report shows another record month of U.S. ocean container import volume in June 2022 versus June 2021. While volumes are lower than May 2022’s record, they remain above the level that has caused port congestion and delays for the last 15 months. Supporting article.
Taken together, the more granular data that underlies the GDP statistic suggests demand for transportation services, both domestic and international, is unlikely to cool substantially as we move through the second half of 2022. Rather than falling off a cliff as some have foretold, it appears we are moving toward a phase where freight markets are normalizing after two years where nothing has been normal.
In today’s market, it’s essential to ensure a successful supply chain. You can achieve this by partnering with a port solutions provider that offers reliable service, timely pick-ups, and supply chain visibility. In addition to this, #TeamTaylor provides free ocean container tracking. Partner with Taylor today.