U.S. waterborne shipments see May gains, reports Panjiva

United States-bound waterborne shipments increased for the third straight month in May, according to data recently issued by global trade intelligence firm Panjiva. These two months of gains followed a decline in February, which was the first decline in 24 months.

May shipments, at 1,078,514, rose 0.8% annually. On a year-to-date basis, shipments through May, at 4,974,896, are up 2.5% compared to the same period a year ago. The firm added that containerized freight was up 3% in May.

Panjiva noted that imports from China dipped 1.6%, in light of what it termed “a potential rush in shipments to beat an increase in tariffs, and it added that the decline in shipments out of China was partly offset by shipments out of Vietnam that were up 19.5% in May and India shipments that headed up 9%. Total shipments out of Asia, excluding China, saw a 7.5% gain. European Union shipments to the U.S. were off 1.9% on the heels of 4.2% growth over the previous three months.

Panjiva's product data for May varied according to sector, with:

-imports related to the auto sector down 15.6%, due to foreign light trucks off 7.1%, due to light sales and cars off 2.5%;
-furniture imports were down for the fourth straight month, off 1.7%, with tariffs continuing to impact sales;
-apparel imports were up 5.3%, ahead of a 0.9% increase over the prior three months, which Panjiva said may be indicative of accelerated shipments should the Trump administration's threat to increase tariffs on all Chinese exports come to fruition;
-imports of toys were up 8.2%;
-steel imports slipped for the fourth straight month with a 5.3% decline, with Panjiva saying they could drop off further if recently removed tariffs on Mexico and Canada improve the economic competitiveness of both countries; and
-energy imports were down for the eighth straight month, falling 3.6%

With year-to-date growth at 2.5% down from 2018's 6.5% annual growth rate, which was spurred on by a pre-tariff rush at the end of the year, Panjiva Research Director Chris Rogers observed that at the same time through the first five months of the year in 2018, annual growth was up 6%.

“Last year was not all about the last minute tariff rush,” he explained. “There had been robust demand up until that point. What we are seeing is a slowdown in imports from China that has been replaced by other countries. There is still underlying demand from American consumers and business but it is not as fast as a year ago at this time.”

Rogers said that is supports by things such as lower import numbers, as per data from the Institute for Supply Management, as well as lower consumer confidence numbers, too.

When asked about the ongoing impact of tariffs on global trade, Rogers said that the White House is more than willing to actively use tariffs in trade policy, as well as non trade-related policy such as in the recent developments with Mexico.

“The answer to the question of if President Trump will continue to do this is yes,” he said. “He faces a split House and Senate so he cannot get anything done through legislation and is using the powers in front of him through executive orders and policy through tariffs.”

As for how long this will remain the case, Rogers said two roads that could stall the ongoing tariff activity are through the ballot box in the 2020 election or because the Senate or Congress decides that using trade policy for non-trade objectives is not acceptable, with the latter being unlikely.

“It is very difficult to have a long-term investment plan and a short-term supply chain management plan while dealing with a potentially slowing economy and everybody wanting something different,” he said.

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