Amid concerns of an imminent recession and the prevailing pessimism surrounding container shipping, there is a glimmer of hope for the U.S. import market. Despite inventory-to-sales ratios remaining higher than pre-COVID levels, recent data indicates a gradual rebound in monthly imports, with figures now reaching or even surpassing those of 2019. While challenges persist, the resilience of U.S. ports and increased imports from China have contributed to this positive trend.
According to Descartes, a global logistics technology company, U.S. ports imported approximately 2,020,197 twenty-foot equivalent units (TEUs) of containerized cargo in April. Although this figure represents an 18% decline compared to the previous year, it marks a 9% increase from March and a 5% rise from April 2019.
The executive vice president of industry and services at Descartes Systems Group, Chris Jones, commented on the data, noting that the volumes demonstrate a consistent pattern with pre-pandemic import seasonality. Furthermore, several ports, including the Port of New York/New Jersey, Savannah, Los Angeles, Long Beach, and Houston, witnessed significant month-on-month import gains in April, further supporting the positive trend.
The upward trend in U.S. imports is not exclusive to Descartes’ data. Container Trades Statistics (CTS), a provider of global volume data from ocean carriers, revealed a similar pattern. CTS’s March numbers indicate a recovery in global volumes, approaching levels observed in August 2022. North American imports, encompassing Canada and Mexico, also rebounded toward September levels.
Since September, weaker flows from China have been a major setback for U.S. imports. However, April witnessed a notable resurgence in imports from China. Descartes data reveals a 27% month-on-month increase in imports from China, with a rise of 156,563 TEUs. This surge surpassed gains from any other country, with Vietnam following in a distant second with an increase of 18,249 TEUs. As a result, China’s share of U.S. imports bounced back to 36.8% in April from 31.6% in March, but it has not yet reached the high of 41.5% observed in February 2022.
While the positive data offers a glimmer of hope, the National Retail Federation (NRF) remains cautious. The NRF’s Global Port Tracker, which monitors import flows to twelve prominent U.S. ports, highlights the decline compared to the peak season of 2021-22, the uncertainties ahead, and a reduced outlook for the current peak season. Estimates suggest that April volumes for the covered ports will be around 1,732,948 TEUs, representing a 23% decline from April 2022 when volumes were inflated due to the unique demand surge caused by the pandemic. However, these figures do indicate a 7% increase from March and a modest 0.7% decrease compared to April 2019.
Global Port Tracker recently revised its first-half volume forecast to 10.4 million TEUs, down from the previous estimate of 10.8 million TEUs, now anticipating a 23% year-on-year decline. The forecast for third-quarter imports stands at 6 million TEUs, reflecting a 7% decrease compared to the same period last year. Analysts attribute this downward revision to the anticipation of sustained inflation rates and surplus inventories.
Despite the challenges and cautious forecasts, Global Port Tracker maintains a relatively optimistic outlook. It predicts that U.S. imports will continue to hover around 2019 levels throughout May and will surpass pre-pandemic volumes from June to September. The peak of inbound volumes to the covered ports is expected in August, with an estimated 2.04 million TEUs, before gradually tapering off.
Imports have historically been a lagging indicator of the demand for containerized cargo. However, in 2022, this lag has been more pronounced due to the port congestion and other factors that caused significant delays. While there have been improvements in import volumes in recent months, the container shipping industry still faces considerable challenges. Supply chain disruptions, capacity constraints, and escalating freight expenses add further complexities to the recovery process.
Regardless of the challenges looming on the horizon, Alba has you covered. Whether your needs are for regulatory expertise, trade services, brokerage, global freight and more, Alba’s experienced and knowledgeable team is ready to be your strategic partner. Reach out to a representative today to learn more.
