After two years of growth, supplies from abroad of transport containers decreased by -8.6% to 598K units in 2023. Over the period under review, imports, however, saw a prominent expansion. The most prominent rate of growth was recorded in 2021 when imports increased by 188%. Imports peaked at 655K units in 2022, and then fell in the following year.
In value terms, transport container imports fell notably to $999M (IndexBox estimates) in 2023. Overall, imports, however, recorded strong growth. The pace of growth appeared the most rapid in 2021 with an increase of 101%. Imports peaked at $1.5B in 2022, and then contracted significantly in the following year.
Imports by Country
In 2023, China (314K units) constituted the largest supplier of transport container to the United States, with a 52% share of total imports. Moreover, transport container imports from China exceeded the figures recorded by the second-largest supplier, Germany (34K units), ninefold. the Netherlands (20K units) ranked third in terms of total imports with a 3.3% share.
From 2020 to 2023, the average annual growth rate of volume from China amounted to +60.1%. The remaining supplying countries recorded the following average annual rates of imports growth: Germany (+67.9% per year) and the Netherlands (+2.0% per year).
In value terms, China ($707M) constituted the largest supplier of transport containers to the United States, comprising 71% of total imports. The second position in the ranking was held by the Netherlands ($65M), with a 6.5% share of total imports. It was followed by Germany, with a 3.9% share.
From 2020 to 2023, the average annual rate of growth in terms of value from China amounted to +37.1%. The remaining supplying countries recorded the following average annual rates of imports growth: the Netherlands (+17.0% per year) and Germany (+21.7% per year).
Import Prices by Country
In 2023, the transport container price stood at $1,670 per unit (CIF, US), waning by -25.6% against the previous year. In general, the import price saw a abrupt downturn. The pace of growth was the most pronounced in 2022 when the average import price increased by 20% against the previous year. Over the period under review, average import prices reached the peak figure at $2,689 per unit in 2020; however, from 2021 to 2023, import prices stood at a somewhat lower figure.
There were significant differences in the average prices amongst the major supplying countries. In 2023, amid the top importers, the country with the highest price was Mexico ($3,258 per unit), while the price for Japan ($236 per unit) was amongst the lowest.
From 2020 to 2023, the most notable rate of growth in terms of prices was attained by Mexico (+32.0%), while the prices for the other major suppliers experienced more modest paces of growth.
June 2024 U.S. container import volume declined 2.1% from May but increased 10.4% compared to the same month last year. Compared to May 2024, imports from China remained flat in June 2024 but boasted 13.8% growth over June 2023. Port transit delays at most West Coast Ports improved while East and Gulf Coast ports experienced marginal increases. July’s update of logistics metrics monitored by Descartes reinforces the strength of imports since the beginning of 2024. Despite strong U.S. container imports, the risk of global supply chain disruptions remains high as the Middle East conflict and news of stalled labor negotiations at U.S. South Atlantic and Gulf Coast ports threaten the stability of global trade.
West Coast ports import share advances versus East and Gulf Coast ports.
Port transit times for West Coast ports decrease overall, while East and Gulf ports experience increased delays.
Panama Canal capacity continues to improve.
Israel-Hamas war continues to threaten trade through the Middle East.
Imports at Gulf Coast ports decreased in volume.
The Port of Baltimore reopens.
The potential for labor disruptions at South Atlantic and Gulf Coast ports later this year increased as contract talks stalled.
Managing supply chain risk: what to watch in 2024.
Consider recommendations to help minimize global shipping challenges.
Despite a marginal month-over-month decline, import volumes remain considerably higher compared to June 2023
June 2024 U.S. container import volumes declined from May 2024, decreasing 2.1% to 2,297,979 twenty-foot equivalent units (TEUs). Versus June 2023, TEU import volume was up 10.4%, continuing to demonstrate exceptional year-over-year performance (see Figure 1).
Figure 1: U.S. Container Import Volume Year-over-Year Comparison
Source: Descartes Datamyne™
Although month-over-month import volume declined, this was the second smallest May-to-June decrease in the previous six years, ignoring import volume performance during the 2020 pandemic (see Figure 2).
Figure 2: May to June U.S. Container Import Volume Comparison
Source: Descartes Datamyne™
For the top 10 U.S. ports, container import volume in June 2024 decreased 59,625 TEUs (-2.9%) versus May 2024 (see Figure 3). The ports of Los Angeles (up 33,253 TEUs) and Charleston (up 14,552 TEUs) experienced the greatest container volume increases from May. The ports of New York/New Jersey (down 59,933 TEUs) and Norfolk (down 28,738 TEUs) posted the largest volume declines.
Figure 3: May 2024 to June 2024 Comparison of Import Volumes at Top 10 U.S. Ports
Source: Descartes Datamyne™
Although Chinese import volumes into the U.S. remained high in June at 891,456 TEUs, they were mostly flat month-over-month (up 0.1% from May) while recording impressive performance over June 2023 (up 13.8%). Compared to the August 2022 high of 1,003,725 TEUs, June 2024 Chinese imports are down 11.2%, continuing to narrow the gap between the benchmark year (see Figure 4). The top two commodity codes (HS-2s) continued to be consumer-oriented goods such as HS-94 (Furniture, Bedding, etc.) and HS-39 (Plastics and Articles Thereof). China represented 38.8% of the total U.S. container imports in June, an increase of 0.8% from May but still down 2.7% from the high of 41.5% in February 2022.
Figure 4: June 2023 – June 2024 Comparison of U.S. Total and Chinese TEU Container Volume
Source: Descartes Datamyne™
For the top 10 countries of origin (CoO), U.S. container import volume in June 2024 declined 5,182 TEUs, a -0.3% decrease from May (see Figure 5). South Korea and Taiwan experienced the most growth, increasing 4,672 TEUs and 3,952 TEUs, respectively. Imports from Germany (down 8,845 TEUs) and Vietnam (down 3,298 TEUs) experienced the greatest volume decreases.
Figure 5: May 2024 to June 2024 Comparison of U.S. Import Volumes from Top 10 Countries of Origin
Source: Descartes Datamyne™
West Coast ports recapture share versus East and Gulf Coast ports.
In June 2024, container import volume share at West Coast ports grew from May as East and Gulf Coast ports receded. Comparing the top five West Coast ports to the top five East and Gulf Coast ports in June 2024 to May 2024 shows that total container import volume at the top East and Gulf Coast ports decreased to 41.4% (down 0.7%) of total container import volume, and the top West Coast ports increased to 44.6% (up 2.5%). Compared to smaller ports, share at the top 10 ports in June 2024 fell slightly to 86.1% (down 0.6%) (see Figure 6).
Figure 6: Volume Analysis for Top Ports, West Coast Ports and East and Gulf Coast Ports
Source: Descartes Datamyne™
Port transit time delays improved among most West Coast ports while East Coast delays extended.
Apart from Tacoma, West Coast port transit delays improved in June 2024. The Port of Long Beach saw the greatest improvement, reducing delays by 2.5 days. East Coast port delays worsened, and Savannah reported the largest increase, adding 1 day to the port’s average delay (see Figure 7).
Figure 7: Monthly Average Transit Delays (in days) for the Top 10 Ports (Apr. 2024 – Jun. 2024)
Source: Descartes Datamyne™
Note: Descartes’ definition of port transit delay is the difference as measured in days between the Estimated Arrival Date, which is initially declared on the bill of lading, and the date when Descartes receives the CBP-processed bill of lading.
Panama Canal continues to improve daily transits.
In June, the Panama Canal Authority announced that starting July 11, daily transits would increase from 32 to 33, and will again increase on July 22 to 34 daily transits. An additional transit slot has been scheduled to open August 5 which would bring total transits to 35—just 1 shy of the canal’s normal operating capacity of 36 daily transits.
Israel-Hamas war continues to threaten trade through the Middle East.
The attacks and ongoing threats on shipping in the Red Sea by the Houthi from Yemen continue to force shippers to divert cargo that would traditionally move through the Suez Canal to longer and more expensive shipping lanes. Shipping concerns will likely increase if the Middle East is further destabilized.
Weaker Gulf Coast import performance.
At 216,902 TEUs, import volumes at the Gulf Coast ports fell in June compared to May (down 8.7%) (see Figure 8). Gulf Coast ports’ transit times were unchanged in June 2024.
Figure 8: July 2023 to June 2024 U.S. Gulf Coast Container Imports
Source: Descartes Datamyne™
Port of Baltimore reopens.
Seventy-eight days following the collapse of the Francis Scott Key Bridge, the Port of Baltimore reopened on June 10. The 700ft (213m) wide and 50ft (15m) deep channel has been fully restored and was deemed “safe for transit” by the US Army Corps of Engineers. June import volumes at the port reached 3,753 TEUs, a far cry from the 45,435 TEUs recorded in June 2023, but it is too soon to tell if, and when, import volumes will recover to levels preceding the incident.
International Longshoremen’s Association (ILA) suspends talks with the United States Maritime Alliance (USMX)
On June 10, the ILA announced it had suspended negotiations with the USMX which were scheduled to take place June 11. The potential severity of trade disruption stemming from the expiration of the ILA and USMX agreement is currently unknown. The agreement is scheduled to expire at the end of September 2024 and, if no resolution is reached, labor action could disrupt operations at these ports. ILA leadership has communicated that they do not intend to extend the current agreement and have advised members to brace for the possibility of a coast-wide strike in October 2024.
Managing supply chain risk: what to watch in 2024.
U.S. container import volume decreased in June 2024 but maintained a strong position when compared to 2023 and pre-pandemic 2019 statistics for the same period. The economy continues to exceed expectations; however, conflict in the Middle East, pending ILA contract negotiations, and recovering trade flows at the Port of Baltimore, point to potential trade disruptions. Here’s what Descartes will be watching in 2024 to see if global supply chain performance will continue to improve:
Monthly TEU volumes between 2.4M and 2.6M. This level will continue to stress ports and inland logistics until infrastructure improvements are made. June U.S. container import volumes remained manageable, falling shy of 2.3M TEUs.
Port transit wait times. If they decrease, it’s an indication of improved global supply chain efficiencies or that the demand for goods and logistics services is declining. June transit delays decreased at most West Coast ports while East and Gulf Coast ports saw increased delays.
Continuing impact of the pandemic. The spread of COVID subvariants continues to add uncertainty to the trajectory of the pandemic and impact supply chains in unpredictable ways as different countries are affected at different times and for different durations. The impact on supply chains and logistics resources has yet to be observed but developments need to be closely monitored throughout the year.
The economy. The U.S. is an import-driven economy, so economic health is an important indicator of container import volumes. As ofJune 3, the Federal Reserve borrowing rate remained at 5.3% to slow inflation which reduced 0.1% from May’s reported 3.3%. Job growth remains strong, and the unemployment rate has remained favorably low.
Panama Canal-based trade flow. Infrastructural upgrades show promise for near normal daily transit slots as it is scheduled to reach 34 daily transit slots in July and 35 in August—slightly below the canal’s normal operating capacity of 36.
Middle East conflict. Attacks on shipping in the Red Sea by Houthis from Yemen are continuing to influence carriers to forego the Suez Canal, extending transit times, and negatively impacting global shipping capacity. The impact of diversions away from the conflict is still minimal on volumes or transit delays for the East and Gulf Coast ports.
ILA/USMX contract negotiation. A potential strike on the South Atlantic and Gulf Coasts could disrupt U.S. container imports later in 2024. Given the current Panama Canal situation, shifting volume to West Coast ports could be extremely challenging or significantly extend transit times. The ILA cancelled planned June negotiations.
Consider recommendations to help minimize global shipping challenges.
June 2024 U.S. container import volumes were down slightly compared to May 2024. West Coast port transit delays show overall improvement in June compared to May while East and Gulf Coast ports fall behind. Concerns surrounding the Panama Canal begin to ease as daily transits are scheduled to reach just shy of normal transit capacity by August. Ongoing conflict in the Middle East is creating pressure on global supply chains that could cause disruptions throughout 2024, and negotiations between the ILA and USMX could fuel disruption at the South Atlantic and Gulf Coast ports later in the year. Descartes will continue to highlight key Descartes Datamyne, U.S. government and industry data in the coming months to provide insight into global shipping.
Short-term:
Evaluate the potential impact of an ILA strike in October 2024 on South Atlantic and Gulf Coast ports to determine alternate ports or trade lanes.
Monitor East Coast port volumes to assess the recovery of the Port of Baltimore.
Track the progress of the Panama Canal Authority’s execution of planned daily transit increases.
Track the Middle East conflict as carriers divert shipping around Africa and impacting shipping capacity and timeliness.
Track the spread of COVID variants to determine when they will hit critical parts of the supply chain, especially in China.
Track ocean shipments and carrier performance as there is still a considerable gap between original ETAs and actual ones.
Evaluate the impact of inflation and the Russia/Ukraine and Israel/Hamas conflicts on logistics costs and capacity constraints. Ensure that key trading partners are not on sanctions lists.
Near-term:
For companies importing from Asia, reevaluate trade that was moved away from West Coast ports.
For companies that have cargo moving through the Suez Canal, evaluate the impact of extended rerouting.
Long-term:
Evaluate supplier and factory location density to mitigate reliance on over-taxed trade lanes and regions of the globe that have the potential for conflict. Density creates economy of scale but also risk, and the pandemic and subsequent logistics capacity crisis highlights the downside. Conflicts do not happen “overnight” so now is the time to address this potentially business disrupting issue.
Note: This report uses the initial compiled release of U.S. Customs and Border Protection (CBP) data and is subject to revision later by CBP. The revised data can be seen in Descartes Datamyne.
Descartes Systems Group, the global leader in uniting logistics-intensive businesses in commerce, released its May Global Shipping Report for logistics and supply chain professionals. In April 2024, U.S. container import volumes increased 3.0% from March and 9.3% when compared to the same month last year, consistent with a strong and resilient economy in the face of global instability.
After Chinese imports declined significantly in March 2024, they bounced back in April 2024 to levels seen in April 2023. Port transit delays continue to improve for the majority of top U.S. ports, as there has been little impact on volumes at East and Gulf Coast ports from either the Panama drought or the Middle East conflict, which continues to escalate. May’s update of logistics metrics monitored by Descartes shows continued strength in U.S. container imports following the robust first quarter of 2024. Global supply chain disruptions are still anticipated, however, given the ongoing conditions at the Panama and Suez Canals, upcoming labor negotiations at U.S. South Atlantic and Gulf Coast ports, the Middle East conflict, and reduced U.S. port capacity caused by the collapse of the Francis Scott Key Bridge in March.
Month-over-month and year-over-year, U.S. economy proves to be robust in April 2024.
Versus April 2023, U.S. container import volume in April 2024 was up 9.3%, demonstrating exceptional year-over-year performance (see Figure 1). April 2024 volumes edged up from March 2024, increasing 3% to 2,208,849 twenty-foot equivalent units (TEUs). Descartes’ April report, however, noted that the effects of Chinese Lunar Year may have masked stronger growth in March 2024, which likely also softened April’s growth. Compared to pre-pandemic April 2019, volume was up 15.1%.
Figure 1. U.S. Container Import Volume Year-over-Year Comparison
Source: Descartes Datamyne™
“Despite the March closure at the Port of Baltimore, U.S. imports showed strong performance in April, as they have since January 2024 as compared to 2023,” said Chris Jones, EVP Industry, Descartes. “Port delays also showed continued improvement in April, as volumes at East and Gulf Coast ports have experienced little impact from either the Panama drought or Middle East conflict.”
In the midst of global uncertainties and economic shifts, the United States’ major container ports stand as beacons of resilience, with inbound cargo volume projected to maintain its robustness well into the summer and early fall months. The National Retail Federation’s latest findings from its Global Port Tracker report paint a picture of sustained strength, showcasing the buoyancy of both the U.S. economy and the container shipping market.
Jonathan Gold, NRF Vice President for Supply Chain and Customs Policy, emphasized the enduring demand as consumers continue to shop, prompting retailers to ensure ample merchandise availability. Despite recent disruptions, the supply chain has adapted admirably, facilitating a smooth flow of goods as the nation gears up for the upcoming back-to-school and holiday seasons.
Ben Hackett, Founder of Hackett Associates, echoed these sentiments, highlighting a consistent influx of goods into ports, even amidst a notable shift from goods to services in consumer spending habits. This resilience is evident despite challenges such as fluctuations in containerized products, geopolitical tensions, higher interest rates, and a tempered pace of economic growth.
The surge in container imports is not confined to a single coast, with the Gulf Coast leading the charge, closely followed by the Pacific and East Coast ports. The trajectory of this surge remains uncertain, prompting speculation on whether it will sustain its momentum or plateau in the near future.
March saw U.S. ports handling 1.93 million TEU, marking a slight dip from February but still reflecting a noteworthy 18.7% increase from the same period in 2023. Looking ahead, May is poised to tie October’s record high, with a projected volume of 2.06 million TEU, showcasing the enduring strength of the container shipping sector.
The report’s forecast for the first half of 2024 anticipates a total of 11.9 million TEU, representing a substantial 13% surge compared to the previous year. This forecast underlines a consistent upward trend, reinforcing the resilience and vitality of the U.S. container shipping industry amidst a dynamic global landscape.
Container xChange, an online container logistics platform, published its August Container Market Forecaster today. Despite the ongoing market fluctuations, the Container Price Sentiment Index (xCPSI) has exhibited resilience and witnessed growth in July as compared to the month of June. The forecaster also noted that container prices have been relatively stable over the past 30 days (July) as compared to the previous 90 days (May-July).
Container Price Sentiment Index (xCPSI) by Container xChange
xCPSI survey for July 2023
The Container Price Sentiment Index (xCPSI) conducts market surveys concurrently and distils industry experts’ collective insights about container price trends into a quantitative measure, providing insight into near-future expectations for the container market dynamics. In July, 2,570 supply chain professionals participated in the survey.
While the opinion is varied, still most respondents (42%) foresee an increase in container prices in the near-term which is indicative of potential market improvement, 28% foresee a further decline in container prices, suggesting a certain degree of pessimism in market conditions. 30% of those surveyed maintained that prices would remain unchanged.
This growth in sentiment underscores the industry’s anticipation of an imminent turnaround, contributing a sense of positivity to the landscape.
Container Industry Stabilizing Amidst Market Fluctuations
Average container prices have been relatively stable in the last 30 days as compared to the price volatility over the past 90 days (30 days – July, 90 days – May-July).
Analyzing a 30-day price delta comparison across key regions, the market has witnessed average price fluctuations ranging from -4% to +5.20% in the month of July 2023. However, the container prices have experienced a visible dip over a 90-day period, with Southeast Asia reporting a substantial -15.73% decline from May to July 2023.
Despite this sustained dip, the sentiment index has stayed strong, even growing in July. The alignment of sentiment and pricing trends suggests an industry outlook that foresees a turning point, shifting away from skepticism towards a shared anticipation of market recovery despite ongoing price adjustments.
Asian ports have been witnessing steady changes in average container prices for 40 HC cargo-worthy containers. For shippers, engaging in container trading or leasing within Southeast Asia at present, compared to three months prior or even just one month ago, presents a viable business prospect.
These average prices for 20 ft cargo worthy containers (region-wise) as of 9th August 2023 is illustrated in the graph below.
Region-wise average prices for 20 ft cargo worthy containers
According to Fitch Ratings, in the second quarter of 2023, China witnessed a 6% year on year increase in total container throughput, a significant improvement compared to 3% growth in first quarter of 2023. This expansion was primarily propelled by intensification of trade under the Regional Comprehensive Economic Partnership (RCEP), introduction of new foreign trade routes at the Dalian port, and upward trajectory of trade with nations participating in the Belt and Road Initiative.
A surge in demand for containers on Intra Asia trade lanes was observed on the platform, for example, the China to India stretch was popular in the month of July on Container xChange.
Here are the top five stretches for both the 40 HC and 20 DC containers Ex China on xChange Insights as on 10th August 2023 –
40 ft HC
20 ft DC
China to India
China to United States
China to Russian Federation
China to India
China to China
China to Russian Federation
China to United Arab Emirates
China to Canada
China to Belarus
China to United Arab Emirates
Leasing charges for 40 ft HC containers on stretches Ex-China are amongst the top 10 stretches on xChange Insights indicating a bounce back from low leasing pick up charges over the last months.
Leasing charges for 40 HC containers on prominent trade stretches
Indications from Drewry point towards Asia’s entry into a peak season, resulting in a notable 42% surge in the Shanghai-Los Angeles spot rate over a four-week period concluding on August 3rd. Simultaneously, the Drewry Shanghai-Rotterdam index also saw a 20% upswing within the same duration.
Due to increased trade between India and the wider Asian region, ocean carriers are adding more capacity on the Intra-Asia trade route. This is also propelled by the sourcing diversification strategy in South Asia, particularly in countries like Vietnam and India. The aim is to increase shipment volumes and improve market presence. These changes in strategy allow these companies to optimise their operations and potentially strengthen their market position. This is important in a dynamic and competitive shipping industry.
United States: A potential Industry Rebound
The Global Ports Tracker forecasts, provided by NRF (National Retail Federation), indicate that import cargo volumes are poised to reach their peak in August 2023. This surge aligns with retailers’ preparations for the winter holiday season stocking.
Real GDP increased at an annual rate of 2.4% for the April-through-June period, after rising 2% in the first quarter this year, surpassing expectations and delaying concerns of a recession.
The S&P Global Flash US Manufacturing PMI posted 49.0 in July, up from 46.3 in June indicates market improvement. A decrease of 0.5% in wholesale inventories also indicates that the inventories are becoming leaner in the US.
“As economists shift from predicting recession to a ‘soft landing’, the industry holds its momentum. While some experts remain cautious, the foundation of a resilient economy, sustained consumer activity, and strategic federal investments improves the outlook of the upcoming holiday season.”shared Christian Roeloffs, cofounder and CEO, Container xChange.
“It’s a shipper’s market this peak season as rates stabilize at below pre-COVID levels and capacity is abundant. Prices are low and this offers a great opportunity for exporters this peak season.” Roeloffs added.
Eurozone Emerges from Technical Recession: A Turning Tide
In the second quarter of 2023, seasonally adjusted GDP increased by 0.3% in the euro area and was stable in the EU, compared with the previous quarter, according to a preliminary flash estimate published by Eurostat, the statistical office of the European Union. In the first quarter of 2023, GDP had remained stable in the euro area and had increased by 0.2% in the EU. Therefore, avoiding a technical recession in Eurozone.
“Although we did avoid a technical recession in the Eurozone, retail trade is down by 0.3%, along with high inflation rate. These high prices will continue to exert pressure on operating costs for shipping companies. Carriers and freight forwarders should anticipate rising expenses related to provisioning ships and providing for crew members. Shippers might also experience increased costs for transporting goods, affecting overall supply chain costs.” Commented Roeloffs.
“Short-term shipping demand may experience a boost, especially for routes connected to countries with stronger growth rates like Ireland and Spain. However, the potential for growth to be less robust than expected warrants cautious optimism. Prepare for potential shifts in shipping demand as companies explore more cost-efficient transport options during uncertain economic periods.” Added Roeloffs.
The shipping industry’s course for the next few months is intricately woven with economic shifts, trade dynamics, and supply chain adaptations. As we approach the holiday season, the industry’s resilience and adaptability will be put to the test.
With Germany recording a recession this year, the demand for goods is expected to slow down in the coming peak season, contributing to a global trade slowdown.
The further decline in consumer spending in the coming months will have a negative impact on peak season demand coming from Europe.
“We anticipate that the recession now in Germany will reduce the economic activity resulting from dropping consumer demand for goods and services, which will in turn impact the peak season demand this year.” predicted Christian Roeloffs, cofounder and CEO, Container xChange, an online marketplace and operating infrastructure for container logistics.
“Reduced consumer demand and economic activity in Europe can lead to decreased imports, affecting export-dependent economies. This can result in a slowdown in global trade and contribute to a broader economic downturn.” added Roeloffs.
Amidst the current challenges posed by rising inflation and the subsequent increase in the cost of living, Europe and UK have witnessed labour strikes taking place this year across several European countries. Countries such as France, Portugal, Greece, Germany, and the Netherlands have experienced such strikes, causing disruptions at ports and significantly impacting the smooth flow of cargo movements.
“The consequences of these strikes have reverberated through the transportation and logistics sector, particularly at ports, which are vital hubs for global trade. Disruptions in cargo movements can lead to delays, increased costs, and logistical challenges for businesses relying on efficient supply chains. It further underscores the interconnectedness of various economic sectors and the importance of stable labor relations for sustained economic growth.” commented Roeloffs on the topic of industrial unrest in form of labour union strikes.
The demand has already dipped if we look at the port throughput in Hamburg, Rotterdam and Antwerp.
All three ports announced declines in throughput over the three-month period (January – March 2023). The port of Rotterdam posted an 11.6 percent decline in container volume to 3.2 million TEU, a trend that started last year due to the elimination of volumes to and from Russia. Antwerp-Bruges handled 3.1 million TEU in the first quarter, a 5.7 percent drop that was led by a nearly two-thirds decline in Russia-related cargo.
Port of Rotterdam Reflects Declining Asian Imports (-14.2% in TEUs) amidst stock accumulation and inflation-driven demand drop
“As the recession takes hold, it is expected to have a significant impact on labour demands and inflation, exacerbating the already declining consumer demand. This, in turn, is likely to lead to negative retail inventory refilling throughout Europe. This will also have a negative impact on exports from Asia.” commented Roeloffs.
Container Availability in Europe
In the year 2021, ports in Europe witnessed a rise in values between week 9 to week 21 (March–May). Cyclic in nature, this was owing to a rise in the number of cargo-filled containers reaching these ports soon after the Chinese New Year until May end, as the retailers restocked heavily preparing for the peak season. This trend did not mirror in 2023. Clearly validating that the inventory replenishment was flat in these months in 2022 and in 2023.
This could have a number of reasons. One, the invasion of Russia on Ukraine. The second, is the rising inflation and recession. And third, the resulting recessionary behaviours by the retailers and the consumers which leads to a slower trade, amongst many other effects.
The CAx graphs below showcase the clear references from above.
Hamburg CAx 20 ft DC
Rotterdam CAx 20 ft DC
Antwerp CAx 20 ft DC
Container prices in Europe
We witness a general decline in the average container prices in Europe for 20 ft DC, while the prices for 40 ft HC have been relatively stable at the key ports. The trend is visible in the graphs below.
Average container prices for 40 ft HC have not declined in May across key ports in Europe
Average container prices chart 40 ft High Cube_brand new
Average container prices for 20 ft DC continue to decline in May across key ports in Europe
Average container prices chart 20 ft DC cargo worthy
Ports in Europe
20 ft DC_ cargo worthy
40 ft HC_ Brand New
May ‘21
May ‘22
May ‘23
May ‘21
May ‘22
May ‘23
Rotterdam
$1765
$1835
$902
$5794
$3736
$3353
Hamburg
$2002
$2010
$1145
$5822
$3603
$3040
Antwerp
$1890
$1876
$906
$5704
$3912
$2975
Year on Year comparison of average container prices in Europe
In 2023, the average container prices for 20ft and 40ft containers are down to almost half of what they were in 2021 when the demand for containers was at its peak.
Annexure:
*Container Availability index (CAx)
With CAx, you can check container availability in major ports worldwide. Learn where there is a shortage or oversupply of empty containers and leverage it for your trading and leasing business.
Thanks to data on container and cargo movements, the CAx figures are forecasted for the next 4 weeks as well.
A CAx value of 0.5 means that the same number of containers full of cargo leave and enter a port in the same week. CAx values above 0.5 mean that more containers with cargo enter and CAx values below 0.5 mean more containers with cargo leave a specific port.
Low CAx values over a period of multiple weeks indicate a deficit of containers, and high values over a period of multiple weeks indicate a surplus of equipment at a specific port.
Amidst renewed whisperings of an impending recession in the second half of 2023 and the possibility of a debt default by the U.S. government that could trigger unemployment and surging interest rates, importers and logistics service providers (LSPs) are bracing for a potential hard landing. On balance, however, there are signs that a number of the challenges to global supply chain performance in 2023 are abating.
BIG GAINS IN IMPORT VOLUMES
Partly driven by a spike in imports from China, U.S. container import volumes increased significantly in April 2023, rising 9% from March 2023 (Figure 1). Although container volume was down 17.8% from April 2022, imports were up 5.3% from pre-pandemic April 2019 and are continuing to track to 2019 levels—an encouraging trend.
Figure 1: U.S. Container Import Volume Year-over-Year Comparison
Source: Descartes Datamyne™
In a dramatic reversal of its downward trend, Chinese imports into the U.S. increased 26.7% in April 2023 compared to March volumes—representing 82% of the total volume increase from the top 10 countries importing into the U.S—although still down 26% from the August 2022 high. Compared to March 2023, April import volumes from Hong Kong (24.4%), Taiwan (19.3%), and Vietnam (13.8%) also increased significantly. In April 2023, China represented 36.8% of the total U.S. box imports, an increase of 5.2% from March, but still 4.7% below the high of 41.5% in February 2022.
PORT PERFORMANCE IMPROVING
In April 2023, U.S. container import volume at the top 10 ports increased 167,174 TEUs from March levels, with the Port of New York/New Jersey showing the greatest overall container volume increase (54,466 TEUs), followed by the Port of Savannah (24,923 TEUs). Given that the dramatic increase of Chinese imports in April should have favored West Coast ports, this growth pattern is somewhat counterintuitive.
Notably, despite the increased activity, port delays declined significantly at all of the top ports (Figure 2). Signaling that global supply chain challenges are subsiding, port transit times were at their lowest level since 2021.
Figure 2: Monthly Average Transit Delays (in days) for the Top 10 Ports
Source: Descartes Datamyne™
Note: Descartes’ definition of port transit delay is the difference as measured in days between the Estimated Arrival Date, which is initially declared on the bill of lading, and the date when Descartes receives the CBP-processed bill of lading.
CHALLENGES EASING
Importers and LSPs will be relieved that the two sides in the International Longshore and Warehouse Union (ILWU) and Pacific Maritime Association (PMA) negotiations are inching towards a new contract. Talks have been dragging on since May 2022 (the contract expired July 1, 2022) but PMA and the union have reached agreement on “certain key issues.” However, PMA commented that several important issues remain unresolved and work actions led by ILWU Local 13 at the Ports of Los Angeles and Long Beach continue to disrupt some operations at key marine terminals.
While some major shippers have been diverting cargo from the West Coast to ports on the East Coast and Gulf of Mexico to avoid potential work stoppages, there has been no serious impact on container processing, as has occurred in the past. The final resolution of the contract could bring some Asia-originating containers that had shifted to rival ports back to major California ports to take advantage of the shorter transit times.
While energy prices are generally moving in the right direction, fuel costs remain elevated, exerting continued pressure on the transportation budgets of importers and LSPs. The price of gasoline—a significant contributor to high inflation rates—increased slightly to $3.60/gallon but was down $0.58/gallon from the same time in 2022, according to the U.S. Energy Information Administration.
Diesel costs also fell slightly to $4.02/gallon, a $1.49/gallon drop from April 2022. While declining fuel costs is always good news for logistics and supply chain companies, gasoline and diesel prices are likely to remain elevated for the foreseeable due to the disruption of global energy markets caused by the war in Ukraine and follow-on sanctions against Russia.
MANAGING SUPPLY CHAIN RISK
Although recent developments appear to indicate an easing of supply chain turbulence, importers and LSPs should keep an eye on several factors and ongoing issues that could cause further disruptions, tailoring their logistics and supply chain strategies accordingly to mitigate risk and promote financial stability.
1. Union issues and labor laws:
Logistics companies should closely monitor the progress of the IWLU-PMA contract negotiations. Progress is tediously slow but movement in either direction will impact port performance and the ability of importers to efficiently move their goods where they need to go. In addition, California’s AB5 legislation has the potential to cause more disruption at California’s port operations.
2. Port activity:
Importers and LSPs need to keep a close eye on import volumes and port transit times. Recent U.S. container imports are continuing to align with 2019 volumes but, if monthly TEU volumes surge to between 2.4M and 2.6M, as witnessed during the pandemic, ports and inland logistics would be under significant strain.
Logistics companies should continue to seek out less congested transportation lanes, including smaller ports, to improve supply chain velocity and reliability. Evaluating alternative transportation lanes into the U.S., including entry through northern and southern borders and inland ports, is also a smart strategy to allay risk.
If port transit times decrease, as they did in April, it’s an indication that the efficiency of global supply chain capabilities has improved or, alternatively, that the demand for goods and logistics services is declining. Either way, pressure on the ports is relieved—good news for logistics-oriented companies.
3. Russia/Ukraine war and inflation
Importers and LSPs should monitor the ongoing impact of the Russia/Ukraine conflict on their logistics costs and capacity constraints, while ensuring that their key trading partners are not on sanctions lists.
On the economic front, the latest Consumer Price Index report available (March 2023) showed a continuing decline in inflation, but the inflation rate remains elevated. Fuel prices—inextricably linked to inflation and a major component of logistics companies’ operational costs—should be monitored closely. Given that fuel prices will remain elevated indefinitely due to the war, logistics companies should evaluate ways to increase the fuel efficiency of their fleets, such as route optimization software or alternative-fuel vehicles.
4. Ongoing pandemic impacts
While WHO recently declared that Covid-19 no longer represents a global health emergency—and the U.S. followed suit, terminating its federal COVID-19 Public Health Emergency act—the pandemic continues to impact global supply chain performance, especially in China. In fact, a 2023 analyst report declared that sourcing from Chinese manufacturers is tied to the largest supply chain risks; the possibility of delays and cancellations from Chinese suppliers is high due to the likelihood of COVID-19 localized disruptions in the country.
FINAL THOUGHTS
The good news is that the pressure on supply chains and logistics operations is continuing to ease. However, we’re not in the clear just yet. Several challenges—from labor issues, elevated fuel prices, and economic uncertainty to the impact of the war in Ukraine and the lingering pandemic-related disruptions—continue to stress logistics operations. But by proactively monitoring key supply chain performance and economic indicators, importers and LSPs can address any capacity constraints or supply chain disruptions that may arise in the short term, while building long-term supply chain resilience to mitigate risk in the latter half of 2023 and beyond.
Descartes Systems Group, the global leader in uniting logistics-intensive businesses in commerce, released its April Global Shipping Report for logistics and supply chain professionals. U.S. container import volumes in March 2023 increased significantly from February 2023, largely driven by the Ports of Los Angeles and Long Beach, which was very counter intuitive, but kept the monthly trendline aligned with pre-pandemic 2019 volumes. Despite overall increases, port transit delays stabilized for all ports. Imports from China continued their downward trend and are almost 10% lower than their high in February 2022. The West Coast labor situation has still not been sorted out. The March update of the logistics metrics Descartes is tracking shows some consistency with pre-pandemic import volume seasonality but continues to point to challenging global supply chain performance in 2023.
March 2023 U.S. container import volumes increased 6.9% from February 2023 to 1,853,705 TEUs (see Figure 1). TEU volume was down 27.5% from March 2022, but up 4.2% from pre-pandemic March 2019. Two points to consider with the March numbers: 1) March has 31 days versus 28 for February and 2) With the Chinese Lunar New Year holiday occurring in January 2023, there still could be some impact on container import volumes in early March 2023.
Figure 1. U.S. Container Import Volume Year-over-Year Comparison
Source: Descartes Datamyne™
“Container import volumes at the Ports of Los Angeles and Long Beach have been in decline, but in March they experienced significant increases (see Figure 2). 2023 continues to track 2019 volumes,” said Chris Jones, EVP Industry and Services at Descartes. “There was also good news in that the port transit delay times remained constant despite the significant volume increases.”
Figure 2: February to March Comparison of Import Volumes at Top 10 U.S. Ports
Source: Descartes Datamyne™
The March report is Descartes’ twenty-first installment since beginning its analysis in August 2021. To read past reports, learn more about the key economic and logistics factors driving the global shipping crisis, and review strategies to help address it in the near-, short- and long-term, visit Descartes’ Global Shipping Resource Center.
About Descartes
Descartes is the global leader in providing on-demand, software-as-a-service solutions focused on improving the productivity, performance and security of logistics-intensive businesses. Customers use our modular, software-as-a-service solutions to route, schedule, track and measure delivery resources; plan, allocate and execute shipments; rate, audit and pay transportation invoices; access global trade data; file customs and security documents for imports and exports; and complete numerous other logistics processes by participating in the world’s largest, collaborative multimodal logistics community. Our headquarters are in Waterloo, Ontario, Canada and we have offices and partners around the world.
Descartes Systems Group, the global leader in uniting logistics-intensive businesses in commerce, released its March Global Shipping Report for logistics and supply chain professionals. The report shows February 2023 U.S. container imports decreased significantly from January 2023 but remained aligned with pre-pandemic 2019 volumes. Despite the reduction, port transit delays increased for the top West, East and Gulf Coast ports. Chinese imports followed the downward trend along with the rest of the top countries of origin. COVID continues to be a factor from ports of origin and the West Coast labor situation has still not been sorted out. The February update of the logistics metrics Descartes is tracking shows some consistency with pre-pandemic import volume seasonality but continues to point to challenging global supply chain performance in 2023.
February 2023 U.S. container import volumes decreased 16.2% from January 2023 to 1,734,272 TEUs (see Figure 1). Versus February 2022, TEU volume was down 25.0%, but only 0.3% lower than pre-pandemic February 2019. Two points to consider with the February numbers: 1) February has 28 days versus 31 for January and 2) With the Chinese Lunar New Year holiday occurring in January 2023, its impact on container import volumes would be seen in late February and early March 2023.
Figure 1. U.S. Container Import Volume Year-over-Year Comparison
Source: Descartes Datamyne™
“Examining imports from January and February in the previous six years, February 2023 volumes would have been expected to be significantly lower than January 2023 (see Figure 2),” said Chris Jones, EVP Industry at Descartes. “Declining container import volumes but rising port transit times demonstrate that, while 2023 volumes resemble 2019, global supply chain performance could remain uneven in 2023.”
Figure 2: January to February U.S. Container Import Volume Comparison
Source: Descartes Datamyne™
The March report is Descartes’ twentieth installment since beginning its analysis in August 2021. To read past reports, learn more about the key economic and logistics factors driving the global shipping crisis, and review strategies to help address it in the near-, short- and long-term, visit Descartes’ Global Shipping Resource Center.
About Descartes
Descartes (Nasdaq:DSGX) (TSX:DSG) is the global leader in providing on-demand, software-as-a-service solutions focused on improving the productivity, performance and security of logistics-intensive businesses. Customers use our modular, software-as-a-service solutions to route, schedule, track and measure delivery resources; plan, allocate and execute shipments; rate, audit and pay transportation invoices; access global trade data; file customs and security documents for imports and exports; and complete numerous other logistics processes by participating in the world’s largest, collaborative multimodal logistics community. Our headquarters are in Waterloo, Ontario, Canada and we have offices and partners around the world. Learn more at www.descartes.com, and connect with us on LinkedIn and Twitter.
Descartes Systems Group, the global leader in uniting logistics-intensive businesses in commerce, released its February Global Shipping Report for logistics and supply chain professionals. The report shows that January U.S. container import volumes increased from December to more tightly align with January 2019 levels. Port delays continue to decrease for top East and Gulf Coast ports but not for top West Coast ports. Key indicators during this period point to stronger than anticipated economic activity. This could impact future container import volumes but, combined with COVID, the Russia/Ukraine conflict and the West Coast labor situation, continue to highlight potential disruptions that could make for challenging global supply chain performance in 2023.
January 2023 U.S. container import volumes increased 7.2% from December 2022 to 2,068,493 TEUs (see Figure 1). Versus January 2022, TEU volume was down 16.1%, but only 0.3% lower than pre-pandemic January 2019. While the Chinese Lunar New Year holiday occurred in January, its impact on container import volumes won’t be felt until late February and early March 2023.
Figure 1. U.S. Container Import Volume Year-over-Year Comparison
“Comparing January 2023 import volume to growth of the previous five years, the 7.2% increase can be considered significant (see Figure 2) and Chinese imports rebounded with even stronger growth,” said Chris Jones, EVP Industry & Services at Descartes. “The January U.S. container import data shows some stability, but a number of issues continue to point to challenging global supply chain performance in 2023.”
Figure 2: December to January U.S. Container Import Volume Comparison
Source: Descartes Datamyne™
The February report is Descartes’ nineteenth installment since beginning its analysis in August 2021. To read past reports, learn more about the key economic and logistics factors driving the global shipping crisis, and review strategies to help address it in the near-, short- and long-term, visit Descartes’ Global Shipping Resource Center.
About Descartes
Descartes is the global leader in providing on-demand, software-as-a-service solutions focused on improving the productivity, performance and security of logistics-intensive businesses. Customers use our modular, software-as-a-service solutions to route, schedule, track and measure delivery resources; plan, allocate and execute shipments; rate, audit and pay transportation invoices; access global trade data; file customs and security documents for imports and exports; and complete numerous other logistics processes by participating in the world’s largest, collaborative multimodal logistics community. Our headquarters are in Waterloo, Ontario, Canada and we have offices and partners around the world.
