Analysis of import-based retail and wholesale data from US government sources, such as the US Census Bureau and the US Bureau of Labour Statistics, shows that the country's inventories are destocking at a slow pace, according to a news report by the Journal of Commerce (JOC).

The JOC analysis reveals that a number of import-focused industries recorded significant decreases in seasonally adjusted inventories in June 2023 compared to 2022.

Wholesale trade in furniture and home furnishings dropped 9.7% from September 2022, while wholesale of professional and commercial equipment fell 6.3% from September 2022. In addition, the report says wholesale clothing experienced an 11.7% drop from the peak in November 2022.

On the other hand, retail sales of furniture, home furnishings, electronics and home appliances were down 11.7% compared to June 2022. Similarly, retail of construction materials dropped 5.5% compared to the peak in August 2022.

Analysts expect the drop to continue for upcoming months, which could hinder market recovery in container freight until mid-2024. JOC cited Jason Miller, an associate professor of logistics at Michigan State University and an analyst for the Journal of Commerce, as saying: “Containerized volumes will continue to track their pre-COVID trendline, which suggests ocean carriers will face challenges into 2024 with managing supply.”  

Signs of this outlook are seen in current liner policies. Container lines have recently announced blanked sailings and reverted to slow steaming in order to balance capacity, especially on longer routes. This comes at a time when several of them are receiving newbuilds, increasing the risk of overcapacity in the market.