Half-empty warehouses in US retail trade could be good news for container lines, which can look forward to the current earnings boom in the container market continuing throughout the year.
If sales developments follow the usual trend, the US retail sector needs to replenish its stockpiles in the coming months. Stockpiles – compared to retail sales – are now at a historic low, reports analyst firm Sea-Intelligence.
“Overall, what this means is that a normal development in sales in the US could – through inventory replenishment – sustain a strong import container growth through all of 2021,” writes Sea-Intelligence.
The analyst firm has looked into the stockpile situation among manufacturers, wholesalers and retailers in the US on the basis of December 2020 numbers from the US Census Bureau.
While the stockpile situation among manufacturers and wholesalers is reaching pre-coronavirus levels in terms of the relationship between sales and stockpiles, the same does not apply to retail.
“We have never in the 28 years of data seen the relative inventory level for retailers be as low as this, and despite 6 months of demand boom, there is still quite a distance up to past low points of inventories,” writes Sea-Intelligence.
High freight rates will continue
Stock market analyst Lars Heindorff of SEB Enskilda agrees that the stockpile situation in the US is an important factor for the red-hot container market, which has been experiencing towering freight rates for a long time now.
“The high rate levels we’re currently seeing will last longer than most expect. This is in part due to congestion, in part that stockpiles in the US remain very low. Looking back on for instance the financial crisis, it took years for the retail sector before stockpiles were replenished. It will last at least up until and including July before stockpiles are replenished,” Heindorff tells ShippingWatch.
