YOUR CART
- No products in the cart.
Subtotal:
₹0.00
BEST SELLING PRODUCTS
₹1,099.00
U.S. container import volumes in January 2023 increased and so did their alignment with 2019 volumes. Port transit delays continued to improve, but only for the top East Coast ports. Chinese imports rebounded with even stronger growth than the overall U.S. container import number. COVID continues to be a factor and the West Coast labor situation has still not been sorted out. The economy, a key factor in container import volume growth, continues to defy predictions. The January update of the logistics metrics Descartes is tracking shows some stability but continues to point to challenging global supply chain performance in 2023.
U.S. container imports approached January 2019 volumes.
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.
Examining imports from December and January in the previous six years, January 2023 volumes would have been expected to be somewhere near those in December 2022 (see Figure 2); however, January 2023’s increase from December was the greatest of the last seven years (7.2%).
The overall U.S. container import volume for the Top 10 ports in January 2023 was up by 107,059 with all but the Port of Savannah experiencing growth (see Figure 3). The Port of Long Beach showed the greatest overall container volume increase.
Chinese imports into the U.S. reversed the downward trend in January 2023 with an increase of 11.0% to 762,967 TEUs but are still down 24.0% from the 2022 high in August (see Figure 4). China represented 36.9% of the total U.S. container imports, a decline of 6.1% from the high of 41.5% in February 2022.
For the top 10 countries of origin, U.S. container import volume in January 2023 increased 106,556 with China representing 70.7% of the growth (see Figure 5). South Korea experienced the greatest growth as a percentage while Germany was the only top 10 with a decline.
West Coast ports make slight gains; smaller ports continue to take share.
In January 2023, the volume share at top West Coast ports and top East and Gulf Coast ports remained In January 2023, the volume share at top West Coast ports and top East and Gulf Coast ports remained relatively stable. Comparing the top five West Coast ports to the top five East and Gulf Coast ports in January 2023 versus December 2022 shows that, of the total import container volume, the East and Gulf Coast ports declined slightly to 45.2% down 0.3% versus December 2022 and the West Coast ports increased in January to 38.6%, up 0.5% versus December 2022. After a low in October 2022 of 36.6%, the West Coast ports have gained 2.0% volume share. The top 10 ports gained share in January 2023 compared to smaller ports, as the top 10 represented 84.0% of all volume compared with 83.6% in December 2022. However, as an overall trend, top 10 port market share has been steadily declining since mid-2022 and January and February 2022 highs of 86.6% .
January port transit delays rise for the West Coast ports and decline for East and Gulf Coast ports.
Overall port transit delays in January 2023 were a mixed story compared to December 2022 (See Figure 7). The major East and Gulf Coast ports saw between a 1.0 to 2.7 day transit time decrease. With the exception of the Port of Long Beach, the major West Coast ports all increased slightly with the exception of the Port of Seattle which grew by 3.6 days to 9.0 days versus December 2022.
Labor, COVID and stronger macroeconomic performance than predicted.
There is still no change in the labor situation which presents continued risk to West Coast port operations. The International Longshore and Warehouse Union (ILWU) contract expired on July 1; however, business has proceeded as usual with the union working with management. Until now there has been no impact on container processing as has been the case in the past. California law AB5 still remains a significant issue with no resolution in sight and there is a risk that more AB5-related stoppages could occur in other California ports in the future causing greater disruption. The continuing labor uncertainty could be a significant reason why import volumes are not shifting back to major California ports despite their reduction in transit delay times over the last year plus.
China is still seeing widespread COVID infections since it loosened it quarantine policies to minimize the longer-term disruptions to society and business. The Chinese population has little to no immunity and the impact of COVID on manufacturing supply chains could continue for quite some time.
Key economic indicators show a stronger U.S. economy than predicted and this could drive more demand Key economic indicators show a stronger U.S. economy than predicted and this could drive more demand for imports in 2023. Gross Domestic Product (GDP) grew 2.9% in the fourth quarter of 2022 and is the second consecutive quarter of growth. Employment increased by 517,000 jobs in January—up almost 290,000 jobs versus December—and unemployment declined to 50-year record levels at 3.4%. Strong employment numbers often put pressure on supply chain and logistics operations as they are labor-intensive and compete more broadly to find resources. Inflation has receded slightly but remains high and the U.S. Federal Reserve raised interest rates again in late January albeit at a much smaller level (0.25%) than previous increases. The Fed has stated that it will continue to evaluate the need to raise interest rates to dampen inflation and possibly the economy. According to the U.S. Energy Information Association, gasoline costs, a significant contributor to high inflation rates, increased slightly to $3.45/gallon and is back to 2021 prices for the same period. Diesel costs are also up slightly to $4.62/gallon. Both are likely to remain elevated for the foreseeable future given the disruption of global energy markets as a result of the war in Ukraine and subsequent sanctions on Russia.
Managing supply chain risk: what to watch in 2023.
U.S. import volume reversed its decline in January and 2023 is starting to look more like 2019, but with continued supply chain turbulence. In addition, several significant one-time events could exacerbate the ability to move goods globally. Here’s what Descartes will be watching:
Consider recommendations to help mitigate the pressure of ongoing global shipping disruptions.
January 2023 U.S. container import volumes reverses the December 2022 decline and aligns closely with pre-pandemic 2019 numbers. The U.S. economy remains relatively strong despite numerous pressures to slow it down and this could drive container import volumes for the upcoming year. East and Gulf Coast poJanuary 2023 U.S. container import volumes reverses the December 2022 decline and aligns closely with pre-pandemic 2019 numbers. The U.S. economy remains relatively strong despite numerous pressures to slow it down and this could drive container import volumes for the upcoming year. East and Gulf Coast ports continue to see port transit times dropping while transit times at West Coast ports are increasing slightly. Still unresolved labor-related issues are keeping importers from moving volume back to the West Coast. This data reaffirms that the pressure on supply chains and logistics operations is continuing to lift, but there are still issues that can cause further disruptions. Descartes will continue to highlight key Descartes Datamyne, U.S. government and industry data in the coming months to provide insight into global shipping. We are staying the course with our current perspectives and recommendations:
Short-term:
Near-term:
Continue to look for less congested transportation lanes, including smaller ports, to improve supply chain velocity and reliability. Total transit time is important, but so is supply chain predictability. Evaluate alternative transportation lanes into the U.S., including entry through northern and southern borders and inland ports.
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.
Marex Media