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Rising US Imports Drive Increased Activity in the US Container Trading Market

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Archives, Global Logistics, Global Trade Daily, News, Ocean Ports, United states news

Rising US Imports Drive Increased Activity in the US Container Trading Market

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A recent survey conducted by Container xChange, on its platform, revealed that the container (shipping) traders and leasing companies in the US are witnessing fierce competition and holding up of inventories due to price pressures. However, they do not experience significant hurdles liquidating their inventory. This comes as a positive sign for the container logistics market in the US despite the broader global uncertainties and challenges.

Read also: May 2024 U.S. Containerized Imports Break 2.3M TEUs

The customers also reported increased container movement on the platform in the past six months as compared to last two years. 

“E-Containers has undergone a transformative journey with Container xChange, establishing approximately 50 new partnerships, executing around 90 trading deals, and transacting 25% of its monthly business volume through the platform.” shared Andres Valencia, CEO of E-containers, a Miami-based container trading company. The company attributes this remarkable progress to Container xChange’s liquidity capabilities.

“We went from 50 to over 500 leased containers in just three months,” says Arnaud Maendly, partner and co-founder of MG-Atlantic Sarl, a dynamic player in the container trading market, primarily catering to freight forwarders and traders in Latin America and the Middle East. 

The latest U.S. trade data, published earlier this month, indicated a notable increase in imports in the US, particularly in automotive vehicles, capital goods, and industrial supplies.  According to Descartes, May 2024 U.S. container import volume continued its robust 2024 growth, increasing 6.2% from April and 11.9% when compared to the same month last year. This surge in imports highlights strong demand for container shipping services to handle the increased volume of goods entering the United States. The rise in exports, though more modest, also points to steady demand for outbound shipping services. Despite the overall increase in the trade deficit, the growth in both imports and exports suggests that the container shipping market remains robust, with opportunities for shipping companies to capitalize on the heightened activity in international trade. However, the widening goods deficit and ongoing trade imbalances may signal potential challenges in managing logistics and supply chain efficiency, emphasizing the need for agile and adaptable container shipping solutions.

The majority of respondents described the US container market as ‘fiercely competitive.’ In such a market, having command over data and visibility is crucial for operational sustenance and for business growth. “It’s essential to have a good grip on container prices and leasing rates to know the best times to liquidate inventory or hold off. Understanding the container market in China and Asia is another critical factor for the container traders in the US.,” inferred Christian Roeloffs, co-founder and CEO of Container xChange, the online marketplace for container trading and leasing.

“Our customers in the US benefit from real-time container price data, enabling them to make informed decisions. Many of our customers, especially in Houston, are growing their businesses through deals made on our platform with trusted partners, saving hours of mundane workload. Smart decision-making is key,” added Roeloffs.

Explaining the impact that technology has made to their business, Nicholas Barrera, Inside Sales at E-Containers explains, “Behind the screen are CEOs, founders, top managers, and shareholders, elevating communication and partnership formation to a whole new level. E-Containers values Container xChange for providing unique access to top-tier executives and decision-makers within partner companies”. The marketplace facilitates clear and efficient communication, optimizing business negotiations and collaboration. 

The US container trading market has had to navigate challenges such as trade tensions, particularly between the US and China, leading to shifts in trade routes and adjustments in supply chain strategies. These tensions have impacted container flows, but the market has benefited from well-developed port infrastructure and increasing digital adoption. Platforms like Container xChange facilitate smoother transactions and greater market transparency, helping traders connect with reliable partners and manage their inventory efficiently.

“While the market shows positive signs, operational challenges such as port congestion, labor shortages, and logistical bottlenecks continue to pose risks. These issues can cause delays and increase costs for traders,” cautioned Roeloffs.

 

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Archives, Global Logistics, Global Trade Daily, Imports/Exports, United states news

US Importers Brace for Freight Rate Surge Amid Strike Threat at East and Gulf Coast Ports

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US importers are caught in a vicious cycle of disruption as a looming labor union strike at East and Gulf Coast ports threatens to escalate freight rates and cause massive disruptions in ocean freight container shipping.

Read also: East Coast and Gulf Coast Ports Face Strike Threat as ILA Halts Labor Negotiations

The International Longshoremen’s Association (ILA) recently announced the suspension of labor contract negotiations with the United States Maritime Alliance (USMX). The current agreement is set to expire on September 30, raising fears of a potential strike.

Peter Sand, Chief Analyst at Xeneta, commented, “Shippers have already been frontloading imports ahead of the traditional Q3 peak season due to supply chain concerns from the Red Sea conflict. With the added risk of disruptions at East and Gulf Coast ports, they may accelerate these efforts, further complicating the situation.”

The increased frontloading of imports has contributed to severe port congestion in Asia and Europe, driving ocean freight container shipping spot rates up by more than $2,000 per FEU. Sand noted, “Shippers are stuck in a vicious circle where their efforts to safeguard supply chains could exacerbate the problem.”

According to Xeneta, spot rates from the Far East to the US East Coast have surged by 64% since April 30, reaching $6,820 per FEU as of June 11. In the first four months of this year, 2.44 million 20-foot equivalent units (TEUs) were shipped from the Far East to the US East and Gulf coasts, accounting for over 40% of total US container imports from the region.

Sand suggested that shippers might consider redirecting imports to the US West Coast, reversing a trend seen during the COVID-19 pandemic. However, this shift could tighten capacity and increase rates on the West Coast and other alternatives like Vancouver or Mexico, which has already experienced a significant rise in Far East imports over the past year.

Xeneta’s forward-looking data indicates that the recent surge in spot rates from the Far East to the US East Coast is expected to slow, with a modest 2.4% increase projected for June 15 compared to the 19% rise observed on May 1. Despite this, Sand believes the threat of disruptions could keep spot rates elevated for an extended period.

“If negotiations collapse and more shippers rush to import goods ahead of the holiday season, we could see spot markets remain high,” Sand warned. He also noted the fierce rhetoric from the ILA, which makes the breakdown in negotiations unsurprising.

Well-prepared shippers with robust risk management and supply chain strategies may have anticipated this scenario, contributing to the early frontloading of imports. Sand emphasized that while shippers hope for a resolution similar to last year’s West Coast labor negotiations, a strike amid ongoing pressure on ocean freight networks could lead to a challenging end to 2024.

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Archives, Global Trade Daily, Imports/Exports, International Trade, United states news

U.S. Bans Russian Uranium Imports to Boost Energy Security

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On May 13, 2024, President Biden signed the Prohibiting Russian Uranium Imports Act (H.R. 1042) into law, marking a significant step towards eliminating U.S. dependence on Russian uranium for civil nuclear power reactors. Effective August 12, 2024, the legislation prohibits the import of uranium products from the Russian Federation. It also includes a waiver process managed by the Department of Energy, in consultation with the Departments of State and Commerce, available until January 1, 2028.

Read also: NUCLEAR OPTIONS: THE TRUMP ADMINISTRATION’S TRADE RESPONSE TO URANIUM PROTECTION

This bipartisan action underscores the U.S. commitment to reducing reliance on Russian uranium, which funds Russia’s military-industrial activities, including its ongoing war against Ukraine. The State Atomic Energy Corporation (Rosatom), responsible for Russia’s uranium exports, is also linked to the country’s nuclear weapons program, posing a national security threat to the United States.

Since February 2022, over 35 Rosatom subsidiaries and associated individuals have been sanctioned under Executive Order 14024. The new law responds to Russia’s demonstrated willingness to weaponize economic relationships, highlighting the risks of continued reliance on Russian uranium for U.S. energy and economic security.

The enactment of this law unlocks $2.72 billion in appropriated funds for the Department of Energy to invest in domestic uranium enrichment. This initiative aligns with international commitments, including the G7’s pledge to reduce reliance on Russian civil nuclear goods and the COP 28 Sapporo 5 agreement to invest $4.2 billion in expanding enrichment and conversion capacity. Additionally, the law supports the Multinational Declaration to Triple Nuclear Energy Capacity by 2050.

The bipartisan legislation, along with the FY24 budget funding, aims to establish a secure, resilient nuclear fuel supply chain independent of adversarial influence, ensuring long-term energy security for the U.S. and its allies.

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Archives, Global Logistics, Global Trade Daily, International Trade, News, U.S. Ports, United states news

Surge in U.S. Inbound Containers Signals Economic Growth in 2024

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In the opening months of 2024, the United States has witnessed a significant surge in inbound container volumes, signaling robust economic activity. According to analysis by renowned analyst John McCown, imports at the nation’s top ten ports experienced a remarkable growth of nearly 20% year-on-year in March.

The dominance of these ports, which handle 86% of U.S. import traffic, underscores the resilience of the world’s largest economy. Despite a slight dip from February’s growth rate of 26.5%, March’s 19.2% increase in inbound containers reaffirms the ongoing strength of economic momentum.

McCown emphasized the sustained growth trajectory, pointing out that the trailing three-month figure shows a substantial 17.8% increase compared to the previous year. This growth, unaffected by the timing impact of events like the Chinese New Year, reflects underlying economic vitality, with comparisons now less influenced by pandemic-related disruptions.

In March, total import volumes reached nearly 1.82 million TEU (twenty-foot equivalent units), marking the first turnaround in seven months for ports on the east and Gulf coasts. These ports outpaced their Pacific coast counterparts, growing at a rate of 21.9% compared to 16.2% growth on the west coast.

Leading the pack, Los Angeles retained its position as the country’s primary import gateway, handling just under 380,000 TEU with growth slightly below the market average at 18.6%. New York & New Jersey followed closely, experiencing a growth of 19.6%, while Long Beach, although third in volume, exhibited the slowest growth among the top ten ports at 8.4%. Notably, Oakland emerged as the fastest-growing port, with volumes soaring by 38.4% year-on-year.

In addition to the surge in imports, U.S. exports continued their upward trajectory, growing by 7.6% year-on-year to reach 930,500 TEU. Los Angeles surpassed Houston as the leading export port, with a substantial 47.3% year-on-year increase.

However, the performance across ports varied, with some witnessing declines or stagnation in export volumes. Despite Houston’s strong growth, Long Beach experienced a significant decline of 21.3% compared to March 2023, while Norfolk and Charleston remained relatively flat.

Analyzing the data over a five-year period, McCown highlighted the disparity among ports, with Houston exhibiting the strongest growth since pre-pandemic levels in March 2019, while Seattle/Tacoma lagged behind with negative growth rates.

The surge in inbound containers and the upward trajectory of exports underscore the resilience and vitality of the U.S. economy in 2024, reflecting positive trends in global trade and commerce.

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Archives, Global Trade Daily, Imports/Exports, United states news

US Export Control, Sanctions & Solutions

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Reform of U.S. export controls that began in 2013 has increased the profile and responsibilities for the Department of Commerce’s Bureau of Industry and Security (which administers the Export Administration Regulations). Among its new duties, BIS now has oversight for certain items previously controlled by the Department of State’s Directorate of Defense Trade Controls (which administers the International Traffic in Arms Regulations), referred to as “600 series items.” Although BIS ostensibly has chief responsibility for these items, overlap between the regimes remains that can ensnare unwitting exporters. In some scenarios, U.S. exporters may require separate licenses from BIS and DDTC, one to export and another train customers on the item. 

Usually, exporters of 600 series items may rely on the license exception found in the EAR at 15 C.F.R. 740.13 to train customers on exported items. This exception permits provision of “operation technology,” defined as the minimum technology necessary for the installation, operation, maintenance (checking), or repair of those commodities or software that are lawfully exported. When instruction implicates “defense services,” however, ITAR trumps the EAR exception and exporters must obtain a separate license from DDTC, even with a BIS license already in hand. 

ITAR requires DDTC authorization to provide defense services to non-U.S. persons. Although chiefly limited in scope to defense articles, the definition of “services” includes any military training of foreign units regardless of whether the training involves a defense article, whether the units are regular or irregular, and whether the training is formal or informal, remote or in person. 22 C.F.R. 120.32(a)(3). USML Category IX(e)(3) further confirms DDTC’s jurisdiction over licensing in these situations by including “Military training not directly related to defense articles or technical data enumerated in this subchapter.”

As with the EAR license exception for training, the USML contains a license exception permitting training on exported items—but that exception only authorizes training for defense articles. 22 C.F.R. 124.2. The dueling license exceptions in the EAR and USML therefore produce an unexpected gap: an exporter of a 600 series item to a foreign military must obtain separate licenses from BIS and DDTC for export and training, respectively. 

Exporters of 600 series items can take steps to ensure they do not become a cautionary tale. Exporters can conduct ECCN audits to confirm exported items are properly classified, review customer lists to ensure DDTC jurisdiction does not exist, and file voluntary self disclosures where necessary. Export control policies and procedures can be reviewed and tailored to the specific needs and demands of the company and specifically identify items or services that deserve greater attention and care. Most important, however, is documenting your compliance efforts to create a record of the company’s good-faith in complying with U.S. export control law. 

Author Bio

Thomas Slattery is a partner in Jones Walker’s Litigation Practice Group. He focuses on internal corporate investigations and compliance matters.

Archives, Global Trade Daily, Imports/Exports

Global Ginger Market 2019 – U.S. Imports Increases Robustly, Turning The Country Into The Most Promising Market

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IndexBox has just published a new report: ‘World – Ginger – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

The global ginger market revenue amounted to $5.3B in 2018, jumping by 2.8% against the previous year. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price). Over the period under review, ginger consumption continues to indicate a strong growth. The pace of growth appeared the most rapid in 2011, when the market value increased by 53% y-o-y. Global ginger consumption peaked at $5.6B in 2016; however, from 2017 to 2018, consumption failed to regain its momentum.

Production 2007-2018

In 2018, approx. 3.3M tonnes of ginger were produced worldwide; surging by 6.7% against the previous year. Over the period under review, the total output indicated a remarkable expansion from 2007 to 2018: its volume increased at an average annual rate of +6.5% over the last eleven years. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, the ginger production increased by +42.8% against 2014 indices.

Exports 2007-2018

In 2018, the amount of ginger exported worldwide stood at 564K tonnes, reducing by -15.1% against the previous year. Overall, the total exports indicated a temperate expansion from 2007 to 2018: its volume increased at an average annual rate of +2.5% over the last eleven year period. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, the ginger exports decreased by -16.9% against 2016 indices. In value terms, ginger exports amounted to $754M (IndexBox estimates) in 2018.

Exports by Country

China dominates ginger exports structure, accounting for 390K tonnes, which was near 69% of total exports in 2018. It was distantly followed by Thailand (54K tonnes), achieving 9.7% share of total exports. Peru (21K tonnes), India (21K tonnes), Brazil (15K tonnes) and the Netherlands (13K tonnes) took a relatively small share of total exports.

From 2007 to 2018, average annual rates of growth with regard to ginger exports from China stood at +3.4%. At the same time, Peru (+49.2%), India (+7.2%), Brazil (+7.0%), the Netherlands (+3.3%) and Thailand (+1.9%) displayed positive paces of growth. Moreover, Peru emerged as the fastest growing exporter in the world, with a CAGR of +49.2% from 2007-2018. China (+21 p.p.), Peru (+3.7 p.p.), India (+2 p.p.) and Thailand (+1.8 p.p.) significantly strengthened its position in terms of the global exports, while the shares of the other countries remained relatively stable throughout the analyzed period.

In value terms, China ($490M) remains the largest ginger supplier worldwide, comprising 65% of global exports. The second position in the ranking was occupied by Thailand ($56M), with a 7.5% share of global exports. It was followed by Peru, with a 5.6% share.

Export Prices by Country

The average ginger export price stood at $1,336 per tonne in 2018, going up by 15% against the previous year. In general, the ginger export price continues to indicate a remarkable expansion. Export prices varied noticeably by the country of origin; the country with the highest export price was Peru ($1,989 per tonne), while Thailand ($1,033 per tonne) was amongst the lowest.

From 2007 to 2018, the most notable rate of growth in terms of export prices was attained by China, while the other global leaders experienced more modest paces of growth.

Imports 2007-2018

In 2018, the amount of ginger imported worldwide amounted to 645K tonnes, shrinking by -8.3% against the previous year.

In value terms, ginger imports totaled $823M (IndexBox estimates) in 2018. Overall, ginger imports, however, continue to indicate a strong expansion. The pace of growth appeared the most rapid in 2010, with an increase of 49% against the previous year. Over the period under review, global ginger imports attained their maximum at $987M in 2014; however, from 2015 to 2018, imports failed to regain their momentum.

Imports by Country

In 2018, the U.S. (89K tonnes), Japan (68K tonnes), the Netherlands (60K tonnes), the United Arab Emirates (47K tonnes), Pakistan (46K tonnes), Malaysia (45K tonnes), Bangladesh (42K tonnes), Saudi Arabia (28K tonnes), the UK (26K tonnes), India (24K tonnes) and Germany (23K tonnes) were the largest importers of ginger in the world, committing 77% of total import. Yemen (12K tonnes) occupied a little share of total imports.

From 2007 to 2018, the most notable rate of growth in terms of imports, amongst the main importing countries, was attained by India, while the other global leaders experienced more modest paces of growth.

In value terms, the U.S. ($125M), Japan ($107M) and the Netherlands ($83M) constituted the countries with the highest levels of imports in 2018, with a combined 38% share of global imports. These countries were followed by Pakistan, Germany, the UK, the United Arab Emirates, Malaysia, Saudi Arabia, India, Yemen and Bangladesh, which together accounted for a further 38%.

Import Prices by Country

In 2018, the average ginger import price amounted to $1,275 per tonne, growing by 11% against the previous year. Overall, the import price indicated a remarkable growth from 2007 to 2018: its price increased at an average annual rate of +5.1% over the last eleven year period. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, the ginger import price increased by +33.3% against 2016 indices. There were significant differences in the average import prices amongst the major importing countries. In 2018, the country with the highest import price was Germany ($2,672 per tonne), while Bangladesh ($279 per tonne) was amongst the lowest.

From 2007 to 2018, the most notable rate of growth in terms of import prices was attained by Pakistan, while the other global leaders experienced more modest paces of growth.

Source: IndexBox AI Platform