U.S.-bound shipments fall in May, according to Panjiva

As the United States continues to take steps to reopen its economy, which has been significantly hampered by the COVID-19 pandemic, data recently issued by global trade intelligence firm Panjiva, for the month of May, showed declines for United States-bound waterborne shipments.

May shipments—at 1,002,314—dropped 7.4% on an annual basis. And on a year-to-date basis, shipments through the first five months of 2020—at 4,840,335—were off 2.9% compared to the same period a year ago. Containerized shipments in May—at 2,043,403—were off 19.7% annually, and on a year-to-date basis, they were off 8.3% annually, to 10,762,310.

Panjiva observed in a research note that the spread between total and containerized shipments was likely due to the result of what it termed small-scale, less-than-container load shipments, stemming from the growth of e-commerce over the course of the COVID-19 pandemic.

Addressing May’s decline in imports, Panjiva explained that it is equal parts demand- and supply-led. As an example, it noted how imports to the U.S. out of China were down 15.8% in May, which was in close range to the 18.1% average over February, March, and April.

What’s more other sourcing locales also felt pain, with imports out of Vietnam down 13.7%, India down 66.1%, which impacted imports out of Asia, excluding China down 25.8% lower, and European-originated shipments seeing an 18.3% decline.

On a product basis, U.S.-bound automotive shipments saw a 68.7% decline in May, with Panjiva pointing to lower sales and a complexity of parts supply chains that will reopen at very different rates globally. Furniture was off 34.3% and apparel fell 48.7%, driven by store closures.

Panjva said that: “retailers are left with difficult decisions to make heading into peak season—whether to assume business as usual or take a more conservative stance.”

On the industrial side, imports of iron and steel fell 19.1%, machinery and electronics dropped 8.5%, and chemicals slipped 1.9%.

In an interview, Chris Rogers, Panjiva research director, said that these numbers are indicative of how the impact of COVID-19 is kind of bouncing around the world.

“Over all trade was down because over all economic activity was down,” he explained. “The countries that have had the strictest lockdowns saw import drops if up to two-thirds, like India. Countries that did not have such a strict lockdown like Vietnam and China have still seen a decline, and that is because there is a lack of demand on the other side of the equation. While the factories there may be open, there is really nobody to sell to. In that regard, it is taking a long time for COVID-19 to work its way through the system.”

The COVID-19 pandemic has also brought about uneven shipping patterns, of late, too, explained Rogers, using May’s drop at the Port of Los Angeles and gains at the Port of Long Beach as an example.

As import volumes continue to see declines, Rogers said that the ongoing U.S.-China trade war continues to loom, too.

“When it comes to the trade war, there is always that background risk that President Trump has decided to not come out with all guns blazing,” he said. “The U.S. could easily come around and say that China changed the rules in Hong Kong and is not meeting its purchasing commitments. One reason for that is the Trump does not want the trade war to unravel and give the Democrats ammo to show a deal cannot be made. Another reason is that the recent protests have occupied the administration’s time and worrying about the technicalities of a trade deal have just not been on the agenda, and it is difficult to see that changing in the next couple of months.”

While not directly COVID-19-related, a broader look at the state of the economy is needed, in terms of companies asking themselves where and what they think demand will be for consumer products over the next six-to-nine months, according to Rogers.

The challenges there, he explained, are a lack of visibility and multiple layers of uncertainty.

“We may not see a Peak Season, as there is no real need for a Peak Season,” he said. “And the logistics sector is dealing with a fair amount of uncertainty at the moment. There is not a lot of confidence, which is why there were so many blanked sailings in June and July. There is not a feeling of better times ahead yet for logistics. There is also the concern about a second wave of COVID-19 later in the year. The idea of having to go back into lockdown from an economic perspective, not to mention the human cost, would not be welcome but needed if that is what has to happen. If that happens, it will mean things will be even tougher on the logistics side…the container shipping lines cannot afford another quarter of these kind of declines.”