Some Hope: U.S. Imports Show Signs Of Recovery In March

U.S. Import Market Looking A Lot Like 2019

A report from FreightWaves shows a bounce back for U.S. imports in March, despite a decrease in cargo from China. Could this mean normalization for the supply chain? Let’s take a deeper dive into the report’s data.

March U.S. Import Statistics

• U.S. imports rose by 6.9% compared to February and 4.2% compared to pre-COVID levels (March 2019).

• Los Angeles and Long Beach ports saw a significant increase in imports (30% and 25%, respectively).
• East Coast ports experienced a month-on-month drop, with Savannah down 6%, New York and New Jersey 5%, and Charleston 3%.

The China Situation

• Imports from China declined by 46,573 TEUs in March compared to February
• China’s share of U.S. imports dropped from 41.5% in February 2022 to 31.6% in March 2023
• Imports from Thailand, South Korea, and Japan increased, balancing the decline from China

Furthermore, China considers banning exports of rare earth magnet technologies for EVs and wind turbines, citing national security, and potentially dominating the supply chain.

National Retail Federation (NRF) Expectations

• NRF expects U.S. imports to continue rising in the upcoming months, but not to pandemic levels.
• Global Port Tracker forecasts U.S. imports to reach 2.13 million TEUs by August, up 26.7% from estimated March levels.
• NRF emphasizes resolving labor negotiations at West Coast ports to avoid further supply chain challenges.

Wholesale Inventories Remain High

• The risk to the modest rebound predicted by the NRF is that bloated inventories take longer than expected to unwind.
• Census Bureau data shows wholesale inventory-to-sales ratios remaining high for containerized goods.

Does U.S. Imports Recovery mean supply chain normalization?

That’s debatable. Port congestion has cleared since imports have declined from their peak, making ship queues off U.S. ports virtually non-existent.

While the Global Supply Chain Pressure Index (GSCPI) suggests that supply chain conditions have normalized, other indicators paint a slightly different picture. For instance, Flexport’s Ocean Timeliness Indicator (OTI) and Project44 data on cargo “rolls” show significant improvements in the supply chain, but they also indicate that a complete return to normalcy has not yet been achieved.

On the other hand, though the world’s largest brewer, AB InBev, reported a decline in sales volume at the end of last year due to steep price increases, recent trends suggest a potential turnaround.