US inventories remain stable despite the noticeable drop in container volume. This observation was made by Container Trade Statistics, which further revealed that imports from Asian countries to the United States saw a 22.5% drop from September to December 2022.
Such a drop usually impacts the inventories of the receiving end, in this case, US importers. However, according to the new analysis by Sea Intelligence, the US economic data for inventories do not show a decline.
In fact, the analysis shows that the size of the total inventories continued to grow despite the drop in shipped goods.
“It can be seen that the retailers as well as manufacturers have managed to halt their inventory growth, but not to reduce them,” says Sea Intelligence. “It can also be seen that the inventories held by wholesalers continue to grow – again despite the sharp drop in physical shipments of goods.”
In addition, the wholesalers’ data indicate that the the purchasing power is weakening, and they are having difficulty selling their goods. This is confirmed by the sales development figures, which continue to show a decline according to the analysis.
A report by the US-based shipping and logistics news agency Journal of Commerce (JOC) supports the validity of the statistics. In a recent article, JOC reported that railroads in North America are witnessing weak intermodal business.
Intermodal providers are forced to stack containers as they are “unable to find cargo to fill the boxes because shippers have too much inventory and not enough sales,” said JOC.
According to statistics from the Intermodal Association of North America (IANA), railroads moved 4% fewers containers last month year-on-year. The data also shows a 5.4% drop for the entire period from November 2022 to January 2023.
In conclusion, Sea Intelligence analysts believe the data raises concern for the US. The observations imply “that the duration of the inventory correction cycle could be longer than anticipated, and thus container volumes could remain severely depressed for quite a while,” says the analysts.