Maritime transport has a good outlook for the peak season, according to Alan Murphy, CEO of Sea-Intelligence.
Sea-Intelligence is a leading provider of research and analysis, data services and advisory services within the global supply chain industry, with a strong focus on container shipping.
“Now that liner shipping is heading into what is normally the peak season for traditional cargo, markets are showing no signs of slowing down,” he said in a statement.
Since the current demand boom is driven primarily by imports from the United States, Sea-Intelligence reviewed the latest figures for personal consumption, inventories, and retail sales for the United States, taken from the Bureau of Economic Analysis and the US Census Bureau.
To start with, he looked at spending on consumer goods, which is unprecedented.
Of the last 12 months, 11 months have had year-on-year growth of more than 10% (this is compared to 2019 and then annualized).
To put this in perspective, in the 18 years leading up to the pandemic, the average growth rate was 4.7%, only crossing the 10% mark five times, and also for a month or two only.
From here, Sea-Intelligence looks at US inventories and the inventory-to-sales ratio, which, for manufacturing and wholesalers, has fallen slightly below their pre-pandemic levels, but the retail ratio has dropped off a real cliff and is fast approaching a ratio of just 1.0.
For reference, in the 28 years prior to the pandemic, the ratio has never fallen below 1.34, and in the two years prior to the pandemic, it was in the range of 1.43-1.50.
Finally, Sea-Intelligence analyzes US retail sales in real terms since 2010 from a long-term trend line. There was a sharp drop in April 2020, but in May retail sales almost returned to the trend line.
Since then, retail sales have completely exceeded the trend line.
Two approaches emerge from the analysis,
Retail sales in the United States should decline again from their current abnormal heights as lockdown restrictions are lifted and stimulus spending recedes.
Current retail sales inventory levels do not appear sustainable and a return to a pre-pandemic ratio of around 1.46 seems like a fairly reasonable estimate.