Panjiva data shows highest August import levels in nearly two years

Data issued this week, for the month of August, by global trade intelligence firm Panjiva showed strong gains, amid the working thesis that an ongoing consumer surge is driving import and shipment levels.

United States-bound August shipments headed up 12.9% annually, while containerized freight handling increased 5.9%, to top 2.70 million TEU (Twenty-Foot Equivalent Units), for the first time ever and eclipsing the previous high set in October 2018.

Panjiva attributed the volume gains to a recovery in demand following COVID-19-related business closures, coupled with what it called the usual run-up in peak shipping activity. But it added that these gains come with the caveat of emerging congestion issues leading to surcharges and increased shipping costs.

Panjiva said that a major driver for August’s gains were related to a 14.3% annual increase in shipments from China, following a 4.1% July gain, while shipments from Asia, excluding China, rose 4%. That tally was driven by a 22.7% gain in shipments out of Vietnam and what it called a return to growth in imports out of India. And imports out of Europe posted a 0.6% annual gain, well above July’s 13.9% decrease and halting a stretch of declines going back to the third quarter of 2019.

On a product level, Panjiva reported that total imports of consumer discretionary items were up, with a 16.1% annual gain, after following a 2% July decline, with consumer staples seeing a 34.9% annual gain, which was driven by a mix of increased food and beverage shipments that were up 36.7%. And home and personal care shipments headed up 13.1% because of COVID-19-related cleaning needs, while healthcare imports dropped 1%, which Panjiva said potentially reflects reduced needs for medial equipment following the rebuild of the national cycle.

On the industrial side, August shipments eked out a 0.2% increase, following a 1.5% July gain, which Panjiva noted is an indication that “the recovery in the economy is far from secure.”

In an interview, Panjiva Research Director Chris Rogers said that shipment gains in August saw the benefits of strong and active LCL (less-than-container load) business, which is expected, due to the currently high levels of e-commerce and drop-shipping activity, which has been a trend throughout 2020.

“The salient point here is that this is a new record, and it is very early in the peak season,” said Rogers. “Clearly, there is a lot of recovery going on…and it is driven in large part by China and other areas that are improving as well. It is all positive news for the shipping companies, and it should not be much of a surprise given how strong shipping rates have been recently. The fact that the shipping rates have stayed high, with the September general rate increases (GRI) largely having gone through, would suggest that there is more of the same to come.”  

Rogers said the August numbers point to a rebound, saying it is important to note that ocean container liners are beginning to reduce the amount of sailings they are blanking [cancelling], while producing new and temporary extra services, such as those provided by Hapag Lloyd and MSC.

“The underlying situation is that there are a lot fewer blank sailings to deal with, due to the surge in demand,” he said. “And the boost of imports in consumer goods…is not necessarily an increase in demand from consumers. It is an increase in demand from retailers expecting consumers to make purchases, and we will learn in third quarter earnings whether companies have imported more than they should have and if consumer spending is there or if they acted too soon. What we might see is companies importing while they can just in case there is another surge in COVID-19 cases or another round of industrial or commercial lockdowns. It is almost a case of ‘let’s fill up the inventories while we know that we can so we don’t get caught [empty] weeks out.’”