Panjiva reports U.S.-bound shipments fall again to finish 2019

Akin to its immediate preceding months, data recently issued by global trade intelligence firm Panjiva showed that United States-bound waterborne shipments finished 2020 with a decline.

December shipments—at 969,53—were off 8.5% annually and fell for the fourth consecutive month, and were down more than November’s 4.2% annual decline. For calendar year 2019, total shipments—at 12,243,739—slipped 1.0% compared to 2018, marking its worst annual output going back to 2009. Panjiva added that containerized freight was down 10.6% in December, which brought the total fourth quarter tally down 7.2% on an annual basis.

Panjiva explained that a driver for the December decline was due to a spike in imports in December 2018, with importers looking to pre-empt, or pull forward, a subsequently delayed tariff increase for Chinese imports that was set for January 2019. And it also observed that concerns relating to spreading tariffs came up in the middle of the third quarter of 2019 ahead of what it called the “confirmation of a delay to further tariff increases came into play in September.

Not surprisingly, U.S.-bound imports out of China were off 19.1% in December, up from November’s 12.7% downward spread, with December marking the most rapid rate of decline going back to July 2018, when the U.S.-China “trade war” got going in earnest with tariffs.

As for other geographic regions, imports from Taiwan and South Korea were off 3.4% and 18.8%, respectively, while Vietnam shot up 33.2%. India dipped by 1.7% for its first decline in two years and imports out of the European Union continued to lag, down 3.5% in December and 0.7% for the fourth quarter.

Panjiva Research Director Chris Rogers said in an interview that while December and 2019 saw declines, it could have been worse.

“Trade is fundamentally driven by consumer and industrial demand,” he said. “The shift in lanes has changed for sure, but overall up until the end of the year demand was down. In December 2018, there was a panic about tariffs and stockpiling [inventory], and in 2019 that panic happened in August. The fourth quarter was bad because effectively there were some very hard comparisons, coupled with the unwinding of inventory from earlier in the year. December’s numbers partly reflect that.”

The downturn in numbers comes from products that had weak demand like autos or were dealing with tariffs like furniture and apparel, said Rogers.

As for 2020, he said challenges for the first few months of the year pertain to an earlier-than-normal Lunar New Year, while he also indicated it is not likely there will be a significant change in trading patterns.

“The U.S.-China Phase One deal does not really roll back any tariffs,” he said. “So any sourcing decisions or logistics routing choices that were made based on tariffs in fourth quarter are pretty much in the same place, whether a tariff was 15% or 7.5% or 25%, it is really not making a huge difference in the long-term decisions being made. I don’t think there will be a significant shift back to China, in terms of imports, in 2020.

On a product level, U.S.-bound furniture imports were down for the sixth consecutive month in December with a 20.3% decline, going back to when tariffs were hiked to 25% in May. Apparel imports fell 15%, a segment in which 15% tariffs were “put in place on a fraction of imports in September,” and autos and parts were down 10.1%, which Panjiva said likely reflects weaker auto demand and potentially some retooling in advance of the United States Mexico Canada Agreement (USMCA) being implemented.