U.S.-bound imports remain strong in February, says Panjiva

Data recently issued by global trade intelligence firm Panjiva highlighted the ongoing strong pace of United States-bound import activity, in February.

Total February U.S.-bound import shipments—at 1,099,310—were up 29.3% annually, while also outpacing February 2019 by 20.1% and are up 25.9% year-to-date, at 2,338,297. Meanwhile, containerized freight imports—at 2,464,007 TEU (Twenty-Foot Equivalent Units) saw a 20% annual increase, for the month, with a 17.8% annual gain, to 5,270,966 TEU. The firm said that cumulative January and February shipments helped to “scrub the effect” of the timing of Lunar New Year imports from Asia and were up 17.9% compared to the same period in 2020.  

On the product side, for February, Panjiva reported the following import numbers:

-consumer discretionary products increased 38.2%, following January’s 26.3% annual gain;
-consumer electronics rose 28.5%, following a 17.2% annual gain in January;
-home furnishings headed up 41.8%, following a 34.4% January increase;
-healthcare and consumer staples increased 46.3% and 38.2%, respectively;
-total industrial imports were up 19.2%; and
-imports of metals and electrical components were up 21.9% and 6.3%, respectively

In terms of origin locations, Panjiva said that imports from China were up 23.8% annually, and imports from Asia, excluding China, saw a 7.2% annual gain, which the firm said marked the first single digit improvement month going back to August 2020, which it attributed to declining shipments from Japan (down 39.1%) and Singapore (down 8.3%). U.S.-bound shipments from Europe were solid, with an 11.5% increase, which was down from previous months.

Panjiva Research Director Chris Rogers said in an interview that the strong batch of import data does not come as too much of a surprise, given the degree of ongoing import backlogs and congestion, especially at the Port of Los Angeles and the Port of Long Beach.

“That needs to be worked through before things get back to normal,” he said. “One needs to be very careful with the annual comparisons, partly because of the timing of the Lunar New Year…and starting next month we will start to see the impact of the year before data, due to the COVID-19 pandemic. We need to be careful with these comps.”

Looking at the March figures, Rogers explained it is not difficult to assess why there is still a high level of import congestion, noting that in looking at import figures on a daily average basis through the fourth quarter of 2020 and into January and February, daily February imports averaged 88,000 TEU, which is only 3% below the daily average over the previous four months.

“If you think about the continual flow of stuff coming in, that is kind of what you are dealing with there,” he said. “There really has not been a significant alleviation in that regard. In a normal year, daily average shipments would be down around 6%-to-10% [from current levels], in terms of sequential declines. The slew of imports in recent months is partly related to congestion, of course, but there is also the question of if retailers are anticipating consumers will spend part of their stimulus checks…or are saving them for a vacation. In a normal year, if there was a huge tax break coming, you would think people would spend at least a part of it on goods and retailers would want to build inventories up.”

Looking ahead, Rogers said that it is likely annual comparisons for imports later in the year may not look as strong as they are now, with the caveat that they could still be solid, due to the expected impact of stimulus checks and the re-opening of the services economy.

That pairing, he said, could serve as an “economic boom,” which historically has correlated with elevated imports, with consumers spending more on everything.

“You would not want to bet on this year being a down year from last year, regardless of annual comps,” he said. “We are in a weird period, where it is not clear things will be better or not. But in the next few weeks companies are going to have to start thinking about what their orders are for the 2021 peak in the October and November timeframe. More than in previous years, there is a very high degree of uncertainty about what you should be buying and how much you should be buying for the holiday season. There are difficult decisions to be made, at the same time, as companies are facing some tough conversations with shipping and logistics providers about the next round of contracts. They want fixed-cost contracts and don’t want imports to be too ‘peaky.’”

And he added that type of situation could lead to importers bumping up orders to September, October, and November, rather than have everything come in October and November.

When asked if 2021 has the potential to be another record-breaking year, Rogers said it is too early to tell.

“You cannot fight fundamentals, and the fundamentals are that this is a recovery year,” he said. “The U.S. now has a massive injection of cash into the system, and presuming people don’t save it, the money is going to get spent…given that we won’t have the huge hole in the May-June timeframe that we had last year, even if everything else is the same compared to previous years, you may end up with an up year overall.” 

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