US-bound shipments are strong in September, reports Panjiva

United States-bound September imports saw significant gains, according to data issued this week by global trade intelligence firm Panjiva.

Coming in at 2,711,435 TEU (Twenty-Foot Equivalent Units), September was up 11.1% annually. But on a year-to-date basis, through September 30, shipments are down 3.9% annually, to 20,874,996 TEU. This marked the second time ever a monthly tally topped 2.70 million TEU.

September imports were largely paced by gains related to shipments of consumer discretionary products, including electronics, furnishings, appliances, leisure products and apparel/textiles, and excluding autos, with a 23.2% annual gain. Panjiva said this marks an uptick from September’s 18.5% annual gain for these products, and far outpacing July’s 1.5% annual gain, while setting two consecutive monthly records, at more than 1 million TEU, as well.

Other sector shipments posted strong numbers, with home furnishings and household appliances each up for the third straight month, with gains of 47.3% and 57.5%, respectively. Panjiva explained that these increases reflect how consumers are making more home improvements related to the ongoing COVID-19 pandemic.

And consumer electronics headed up 17.5%, topping a 7.6% annual gain in August, which the firm sais may have been spurred on by importers like Best Buy and also manufacturers like Samsung Electronics. On the other end, leisure product imports, which include toys, and textiles/apparel saw minimal gains, at 0.8% and 0.9%, respectively, with apparel growing after being down for nearly a year.

Panjiva Research Director Chris Rogers said September volumes were well in line with expectations.

“After we saw July’s data come in above the prior year and followed by a big acceleration in August, that was a good sign,” he said. “I think what surprised me was the fact that September was stronger than August, and that is very rare. If you look at the past 10 years, September is normally about 5% lower than August, and that has to do with factory openings and delivery requirements. It can take up to six weeks to go from a Chinese factory to an American store, when thinking about the timing for arrivals.”

Another driver for September’s strong performance, according to Rogers, is retailers’ expecting earlier holiday shopping, for consumers looking to avoid crowds. Another factor focuses on concerns related to shipping later in the year, too, he added.

What’s more, with total U.S.-bound shipments down roughly 4% through September, highlights how far the economic recovery has come so far, Rogers explained.

Looking ahead, even shipment gains in recent months, Rogers said it is unclear if the holiday shopping period will be highly active or not.

“People may shop earlier, but there are still millions of unemployed Americans that are not going to be going out and making holiday purchases,” he said. “For things like ‘stay at home’ stuff, such as electronics or a new table to work at, once you buy that, you do not need another one, unlike certain healthcare products and consumer staples like personal care or cleaning products. That market will remain strong, but I do worry that we will see an [inventory] overbuild on the discretionary side, if we don’t see the anticipated spending come through. It is difficult to reconcile the current unemployment figures with some estimates and expectations out there for a strong holiday sales season.”

Another factor that could impact shipment and import levels is what direction the election goes in and how that could impact policy, he added.

“Some of the surge in imports of industrial products has really been driven by a handful of industrial machinery and agricultural equipment,” said Rogers. “If we get a close election or even if the Trump administration refuses to concede, then there will be a big chunk of business uncertainty.”

When asked if October shipment levels will be in line with August and September, Rogers said it is reasonable to expect that the levels may be in the same range, whereas the growth levels may not be.

The reason for that has to do with congestion in major ports for goods coming out of China and a huge surge in imports out of China in August and September set to arrive in the U.S. in October.