U.S.-bound shipments trend down in June, reports Panjiva

United States-bound waterborne ocean cargo shipments fell in June 2019, according to data recently issued by global trade intelligence firm Panjiva.

By ·

Following a three-month stretch of gains from March through April, United States-bound waterborne shipments fell in June, according to data recently issued by global trade intelligence firm Panjiva. The gains from March through April followed a decline in February, which was the first one in 24 months.

June shipments––at 1,010,429––were off 2.7% annually, and on a year-to-date basis, shipments through June––at 5,985,325––are up 1.6% compared to the same period a year ago, while containerized freight was off 3%. What’s more, Panjiva noted that June represented the first non-seasonal (Lunar New Year) decline going back to June 2016, with second quarter growth down to 0.5% annually, compared to growth rates of 2.7% in the first quarter and 9.4% for all of 2018.

Panjiva attributed the June shipment decline to being “driven entirely by imports from China,” which were down 9.8% annually in June, compared to a 1.6% decline for the same period a year ago. And it added that this decline was driven by the May increase in “list three” tariffs, on $200 billion in Chinese goods from 10% to 25%.

Other nations cumulatively accounted for a 2.8% gain in U.S.-bound imports, which Panjiva observed confirms “the switching of sourcing away from China on a broad basis. Supplier shipments from Asia, excluding China, were up 6.5% in June, with a significant surge by manufacturers in newer production centers, like Vietnam and India, which were up 20.5% and 12.8%, respectively. Shipments out of the European Union fell 0.6% annually, coming off of a three-month gain of 4.5%.

Panjiva’s ocean cargo import data for June varied according to sector, with:

  • imports of tariff-impacted products taking a hit, with imports of chemicals down 13.9%, furniture down 11.9%, and machinery/electronics down 3.8%; and

  • imports of toys and apparel saw gains of 14.5% and 4.5%, respectively, spurred on by shippers trying to get ahead of tariffs on “list four” products

Panjiva Research Director Chris Rogers wrote in the report that the race to beat tariffs should slow, given the de-escalation of tensions through the risk of a sudden increase in tariffs that was seen in May 2019 and September 2018 on a prior breakdown of U.S.-China talks and may see buyers take a conservative stance.

“That may result in an earlier than normal peak season surge in July and August,” he wrote.

In an interview, Rogers explained that the June shipment decline was expected for a long time.

“It is down to the cumulative effect of tariffs covering enough products for a long enough time period that you start to see this reversal come through,” he said. “And it is also worth bearing in mind that June 2018 saw an acceleration in imports, with importers rushing to get ahead of July 2018 tariffs. We are effectively a year down the line now. Tariffs are very much the new normal and are what’s driving some of these behaviors. What is not normal, though, is that the level of tax went up in May…and that has choked off some of the supply for things like chemicals and furniture and less so for machinery and electronics, as they have been exposed to a higher level of tariffs for longer.”

Supply chain executives are in a difficult position in July and August, he added. The reason for that is the regular peak season is coming up and they don’t want to be selling inventory any sooner than they want to, while also needing to be cognizant of the fact when change comes from the Trump administration, it comes quickly.

“It is not known what list four tariffs will be for and if there is an actual list or not,” he said. “It is hard to plan a supply chain on that basis. Do you try and get ahead of the game and import sooner or do you accept that there will be additional costs but unlikely it will be 25% or 10% on day one. A lot of companies will assume it will be lower at first, and if that is the case there is not as much of a rush.”  

About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Latest Whitepaper
How to Manage Increasing Labeling Demands
Download the report to learn best practices for managing those increasing label demands.
Download Today!
From the August 2019 Logistics Management Magazine
The staff of Logistics Management (LM) is honored to present the logistics and transportation community with the results of our 36th Annual Quest for Quality Survey
Ocean: Protecting margins in a soft market
Warehouse Voice Technology Speaks for Itself
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly newsletter!
Latest Webcast
Creating the ROI for Multi-Carrier Parcel Shipping Solutions
This webinar will reveal how manufacturers, retailers, and 3PLs can utilize their own data to identify and demonstrate ROI for multi-carrier parcel shipping by leveraging state-of-the art business intelligence to increase performance.
Register Today!
36th Annual Quest for Quality Awards: Winners in the spotlight
Which carriers, third-party logistics (3PL) providers and U.S. ports have reached the pinnacle of...
State of Logistics in 2019: What’s next?
Tight capacity, high rates, rapid e-commerce growth and a booming economy fueled an 11.45% rise in...

Got labor? How supply chain companies are recruiting talent during a labor crunch
How are companies faring in the race to recruit and train high-level supply chain talent in a market...
35th Annual Salary Survey: Compensation matters more than ever
While job satisfaction remains the primary reason for today’s logistics managers to stay with one...