U.S.-bound shipments bear the brunt of coronavirus and reduced demand, says Panjiva

Data recently issued by global trade intelligence firm Panjiva pointed to United States-bound waterborne shipments falling for the sixth consecutive month in February.

February shipments—at 846,054—decreased 7.5% compared to February 2019, and containerized freight shipments, for the month, were down 4.5%. On a year-to-date basis through February, U.S.-bound waterborne shipments—at 1,874,305—are down 5.4% compared to the same period a year ago.

Panjiva said that even though the timing of the Lunar New Year can distort figures, the 13.5% drop in shipments over January and February, from China (including Hong Kong) declined “may indicate” that the first impact of the coronavirus disruptions on shipping.

A major driver for February’s decline was attributed to imports from China, including Hong Kong, in the form of a 21% annual decline, while imports out of Asia, not including China, offset that 21% decline, rising 6.2%. This was paced by a 24.7% gain in imports out of Singapore, a 28.3% increase in imports out of Vietnam, and an 11.2% in imports out of India, with India up a strong gain from low single digit gains in the fourth quarter and January. Elsewhere, imports out of the European Union were down 3.7%, following a 7.1% January decline and a 0.5% fourth quarter decline.

On a product level, Panjiva reported that furniture imports saw a 9.3% annual decline, coming off of a flat January, with apparel imports. The firm noted that both of these categories are subject to section 301 duties on imports from China, adding that these tariffs may have raised costs and reduced spending power, even though tariffs on apparel dropped to 7.5% from 15% in the middle of February as part of the U.S.-China phase 1 trade deal.

Industrial shipments also declined in February, with steel imports off 16%, machinery and electronics down 10.4%, and chemicals seeing a 7.3% decline, with each category still subject to 25% duties on Chinese imports, said Panjiva.

Looking ahead, Panjiva expects more of the same in March, citing a recent ISM survey showing import expectations at a ten-year low, coupled with what it called the expectations of COVID-19 disruptions outside of China.  

Panjiva research director Chris Rogers said that there is typically an expected drop in post-Lunar New Year shipments, and this year was no exception, given the factory shutdowns in China and the coronavirus situation as well.

“There is always going to be a drop, but by how much is always the question,” he said. “A lot of [cargo] arrives into the U.S. in February, just before the Lunar New Year. The West Coast port numbers will be bad, and the East Coast numbers will be down, too, but not as bad. March will show the full extent of it, and we will have a full Q1 comparison to see where things actually ended up.”

In terms of the impact of the coronavirus on U.S. import levels, Rogers said it is likely consumers will only spend on essential items and cut back on spending in general, which will reduce demand for various consumer products, too. Items that may see declines, he cited, included durable consumer goods, apparel, and furniture, among others.