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U.S. container import volume in June 2024 posts further strong year-on-year gains as labor talks stall at South Atlantic and Gulf Coast ports

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.

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.

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.

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.

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.

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.

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%).

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.

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.

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 of June 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.
    Source: The Descartes Systems

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