Panjiva data shows a rebound in U.S.-bound ocean cargo shipments in March 2019

On the heels of the first decline in United States-bound waterborne shipments, for the first time in 24 months, in February, March shipments were a return to growth, according to data recently issued by global trade intelligence firm Panjiva.

March shipments, at 919,696, were up 6.8% compared to February, which fell 4.1% compared to January and followed an aggregate increase of 5.5% over the previous three months. On a year-to-date basis, shipments for the first three months of 2019, at 2,896,821, are up 2.6% compared to the same period a year ago.  

Panjiva noted that March saw a 3.9% decrease in shipments from China and were down 5.7% for the first quarter, adding that this likely serves as a reflection of the continued effectiveness of U.S. tariffs on roughly $250 billion in imports that have been in effect going back to last September. While imports from China were down, Panjiva said they were offset by shipments out of Asia, not including China, which rose 17.8% annually. Asian countries seeing the highest growth rates were Vietnam (35.2%), India (26%) and Thailand (23.9%), with all three countries seeing growth over the last three months.

Growth in shipments outside of China was also on display in the European Union, according to Panjiva, with U.S.-bound imports out of the EU up 11.3% in March compared to 1.7% in February. Panjiva pointed out that this growth out of the EU occurred despite the EU lacking the labor cost advantage that Asian markets have.

Panjiva Research Director Chris Rogers said in an interview that the March shipment numbers highlights the vagaries of the Lunar New Year in China having an effect on volumes. The reason for that, he explained, is that in 2018 factory closures in Asia occurred at the end of February, disrupting exports to the U.S., but with the Lunar New Year this year being in early February, exports were up for that month and helped to make the March numbers more complete.

“Aside from that, another elements logistics services providers have been talking about is that American consumers are still buying what they used to buy, but they are buying from Vietnam or India or Thailand, instead of China,” he said. “The absolute volume of activity may not change that much but the trade lanes may change. We are seeing that separate the ‘overhang’ from the December surge, whereas what we are seeing now as part of a longer-term position.”

On the product side, Panjiva data showed that industrial demand for imports was the highest among investment products, with imports of machinery and electronics up 10.4% in March. On the other end iron and steel and chemicals each dropped for the second month in a row, down 2.6% and 3.3%, respectively.

Rogers said this suggests that long-term demand for many industrial products remains robust but could bear the brunt of a slowdown in manufacturing activity in the short-term.

Consumer-based product shipments were mixed in March, with imports of automotive products and furniture, both of which have been impacted by tariffs on Chinese exports which Panjiva said may not be reflective of consumer demand, down 13.1% and 2.1%, respectively. And it said that short-run durables, like apparel, rebounded by 7.4% annually, as new season products come into stock.

With reports indicating a U.S.-China trade deal could be completed by the late May/early June timeframe, Rogers explained the current situation puts mid-term planning on hold, as it relates to where shipments are originating from being in some doubt.

“In the longer term, a deal is still expected, with the ‘trade war between the U.S. and China at least becoming less of an active war in the near term,” he said. “Another element to bear in mind is the ratcheting up of negative sentiment between the U.S. and the EU, with the U.S. looking to put tariffs on lots of products like aerospace subsidies and the EU is doing the same. And President Trump will decide by May 17 whether or not to apply tariffs to the automotive sector, which would have a major impact on Europe, as well as Japan, China, and South Korea. There is more concern among businesses right now about the state of U.S. relations with Europe than U.S. relations with China.”