Panjiva says U.S.-bound waterborne shipments see gains in December and for 2017

Data recently issued by global trade intelligence firm Panjiva highlighted a strong December and full-year 2017, over all, for United States-bound waterborne shipments.

December shipments––at 965,917––were up 3.8% annually and down 2.0 percent compared to November’s 979,797. The busiest month of 2017 was August, which came in at 1,068,521 for an all-time record. December also marked the 17th time in the last 18 months that shipments were up.

For all of 2017, shipments rose 4.1% annually to 11.6 million, which, along with 2016, is the second time in Panjiva’s shipment-tracking history they topped the 11 million mark. What’s more, 2017 saw three of the four best months on record, according to Panjiva.

The uptick in December shipments were paced, in large part, by increased momentum from Vietnam to the U.S., with a 17.3% and 12.6% gains for December and 2017, respectively. Panjiva said this was driven by a relocation of manufacturing capacity from mature Asian markets, including Japan (down 3.2% for the year) and Taiwan (down 6.8% for the year), while adding Vietnam has consistently outpaced Japan as an exporter to the U.S. going back to April 2017.

Even with Vietnam’s emergence, Panjiva said that China remains in the top slot for U.S. import growth, rising 7.1% in 2017. But it cautioned that may be coming to an end should the White House follow through on a “threat to apply broad-based tariffs in retaliation for intellectual property rights rules violations.

In an interview, Panjiva Research Director Chris Rogers said that there myriad reasons for 2017 import growth.

“Early in the year, there was acceleration in imports, because people were worried President Trump would implement tariffs or other protectionist measures,” he said. “And we saw in the both business confidence and consumer confidence at high levels throughout the year and still are high now, having hit records. Closer to year-end, companies were shipping later than in previous years, with retailers and other importers looking to optimize inventories.”

Rogers said furniture imports strong throughout 2017, which is a reflection of continued consumer confidence. Panjiva data indicated furniture imports rose 7.4% in December and were up 8.7% annually. But it cautioned that with 51.9% of U.S. imports from China in 2017, that could be viewed as an area for tariffs to be applied if the White House is willing to make consumers bear the price of not buying American.

Other strong import performances in 2017 were seen with machinery and electronics up 7.5% in December and up 6.8% for the year. Imports of autos and apparel did not fare as well, with 2017 declines of 2.3% and 0.7%, respectively, although apparel did rise 4.1% in December.

What’s more, Rogers observed that business sentiment in regards to U.S. trade is now at its highest level since 2014, coupled with multi-year highs on a global basis. And he noted that it would be surprising for import growth to slip in the short-term barring “significant protectionist policy intervention from the government.”

Looking at 2018, Rogers said it is reasonable to expect the year to start off strong, adding that prospects could increase, depending on how things go with tax reform efforts, as many companies are waiting to see how things go before acting on them.

Keeping a watchful eye on how the White House deals with China will be required, said Rogers.

“Trump has momentum coming out of tax reform, so it will be interesting to see what happens leading up to the mid-terms and if the Republicans retain control of Congress,” he added. “Acting against China may be ‘easy’ as it is largely a matter of implementing tariffs. The question is where those tariffs are implemented. It could have a big impact on the trade deficit. Or he could not do that as it may be unpopular and do something else that could impact the manufacturing supply chain, but that remains to be seen.”