Panjiva reports strong finish to 2020 for U.S.-bound imports

In a year unlike any other, 2020 saw more fluctuation than any other, driven by the ongoing COVID-19 pandemic. That was evident in United States-bound imports, for both December and calendar year 2020, according to data issued this week by global trade intelligence firm Panjiva.

Total December Twenty-Foot Equivalent Units (TEU)—at 2.76 million TEU—headed up 20.4% annually, which Panjiva said marked the fastest rate of expansion going back to August 2010. And, for all of 2020, total import volume hit 29.25 million TEU, representing a 1.7% annual gain and also setting a new record. And total December shipments—at 1,243,284—were up 6%, from November to December, and up 28% annually, with full-year 2020 shipments—at 12,933,059—were up 5.6% annually, setting a new record, topping 2018.

On the product side, for December, Panjiva reported the following:

-consumer discretionary products increased 34.3% annually, following November’s 30.7% gain;
-household appliances increased 89.6%, which was below October’s seasonal peak;
-leisure products increased 46.2% during the later stages of the toy import season;
-healthcare products increased 38.9%;
-consumer staples increased 31.2% and were paced by a 64.2% gain in household and personal care imports;
-apparel imports were up 5.4% annually but below November’s 9.1% annual gain; and
-industrial imports grew at a slower rate but still were “historically high,” up 18.3%, including a 48.0% increase in agricultural machinery, with building products up 23.4%

In the report, Panjiva Research Director Chris Rogers observed that the extended and accelerating rate of import growth has served as a major driver of port congestion, with that congestion likely indicating that deliveries scheduled for earlier in the Peak Season arriving later. What’s more, he added that there is little sign of what he called an easy return to normal before the Lunar New Year in mid-February.

“These numbers indicate where we arrived, at the end of the year,” Rogers said in an interview. “People were spending their holiday money on ‘stuff,’” he said. “If you are going to be home another six months, you might as well make it comfortable, whether it is getting a new office chair, couch, television, or on other things. The irony here is after everything we all have been through, we have ended up not quite back where we started—as the numbers are up year-over-year—the numbers really don’t indicate that there was a pandemic.”

The majority of trends impacting U.S.-bound imports have been consumer-related, he noted, as well as specific industries recovering more recently, and also supplies out of Asia, which is also largely consumer-related.

“December was just a continuation of what we saw throughout the fourth quarter,” he said. “Normally you would not see a drop-off in December, but you would not usually expect it to be strongly up over November. That was the case in 2018, due to tariffs, and it was in 2020, as there is a lot of congestion working through the system, with vessels stuck off shore outside Los Angeles and Long Beach. There is still a lot of that congestion to unwind, and we are also seeing it unwind in the country as well. The trends in December were very much the same as they were throughout the fourth quarter, in terms of unwinding congestion, and that is going to continue.”

In terms of how things play out from here, in regards to the import outlook, Rogers explained that if the boom in traffic has been driven by people making themselves more comfortable at home, that is not something that needs to happen every year. The reason is, he said, that certain items like desks, furniture, and televisions don’t need to be replaced every year.

And if a large majority of people receive the COVID-19 vaccine this year, 2021 could be much different from 2021, he said, with congestion earlier in the year and a much quieter Peak Season, because consumer spending needs may not be there.

With the Biden Administration set to take office in the coming days, Rogers said that the transition will not have any type of immediate effect on trade flows, with no quick decisions on China, Europe, or tariffs expected to be made over the next few months.

“Biden has said he will outline more details on trade policy once he is in office, and there will not be any demonstrative action that will lead to any changes in supply chains certainly in the first quarter and maybe not that much in the second quarter either,” he said. “What we see in the first quarter is the unwinding of all of this congestion that is in the system. The Lunar New Year drop-off should alleviate some of the pressure on outbound traffic from China. There are going to be some blank sailings going on over the Lunar New Year that will help to clear out things. And hopefully, in the second quarter, we will be back to a somewhat more normal system. It is just going to be a matter of where industrial and consumer activity is at that stage.”

Rogers added that Panjiva will be keeping a close eye on emergences of micro-bottlenecks that can cause widespread chaos for specific products in specific industries.

“We are seeing that in the automotive industry, with a shortage of semiconductors,” he said. “That was basically because the car companies said a few months ago that they did not need them, because they were not building many cars at that time. But six months down the line they did not have what they need. Even as we are going through a recovery, we are going to get these hiccups from place to place, and we will be watching the manufacturing supply chains quite closely for this.”

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