The decreasing trend in laden imports to the North American West Coast (NAWC) hints at a continued demand decrease into 2023 with additional contractions in demand across Chinese New Year highly likely.

"With capacity levels already high, and additional capacity being released due to the reduction in bottlenecks, this drop in demand puts pressure on the shipping lines to blank additional capacity during Chinese New Year to stop a potential acceleration in freight rate decline," says the latest update from Sea-Intelligence.

A slight positive, however, is the increase in the laden-export-to-empty-export ratio (improvement towards laden exports). "While the ratio is still below 1 – favouring empty exports – it increased from 0.5 to 0.7 in November. The improvement is not because of a sudden burst of laden exports, which are still contracting within -8% and -11% but a slowdown in empty exports, the growth of which has now nearly stagnated."

When annualised against 2019, volume growth on the NAWC stagnated during the first two months of the traditional Q3 peak season and outright contraction in September 2022, and the trend continued into October and November.

"Figure 1 shows the laden import volumes on both a Y/Y basis as well as an annualised basis compared to 2019. If we look across the latter metric, the growth rate has been on a downward trend from a peak of 14.2 percent in March 2022 to 4.4 percent in June, and then briefly dropping below 0% in July to -0.7 percent, before dropping again in September to -3.3 percent. In October and November, the growth rate continued to decline, dropping to -4.1 percent in November."

On a Y/Y basis, laden imports have been negative for most of the period since mid-2021, and have dropped below -20 percent in October and November 2022, the update added.

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