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US Imports Slow in September As Hectic Holiday Remains in View

The record flurry of cargo entering the U.S. and container ships anchored at coastal ports saw a bit of a slowdown in September. U.S. containerized freight imports by volume increased 5.1 percent year over year and 17.4 percent on a two-year basis to 2.86 million TEU (twenty-foot equivalent units), according to analysis from Panjiva, the supply chain research unit of S&P Global Market Intelligence.

The year-over-year jump was down from August’s 11.2 percent annual increase. While the growth on a year-over-year basis is expected continue decelerating for the holiday season, Panjiva reaffirmed what just about everyone has been anticipating—imports will be breaking records in the 2021 peak period.

If imports outlooks remain unchanged, the fourth quarter is expected to grow at a 4.7 percent rate over last year’s record-breaking season. While the rate doesn’t appear to be a massive increase at first glance, the comparison is against 2020’s all-time highs after the U.S. economy reopened, instead of the lockdown lows from earlier in the year when demand had fallen off.

The excess backlog comes as more retailers hope to boost their inventory levels amid concerns that they won’t have enough product for the upcoming shopping rush. For example, Christopher Rogers, a senior researcher with Panjiva, warned as far back as July that Nike “may run out of Vietnamese sneakers.”

“Importers may be hoping that more surge capacity remains untapped, however, as increased imports would likely alleviate some of the pressures facing industries that rely on strong holiday sales,” Panjiva researcher Eric Oak wrote in a blog post.

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The report comes days after National Retail Federation (NRF) and Hackett Associates projected that the month would see 2.25 million TEU loaded into major U.S. ports, a 6.7 percent year-over-year increase.

Panjiva’s research said that September’s import total brings overall third-quarter growth to 10.2 percent, or 15.3 percent compared with the third quarter of 2019. The rate translates to an average of 95,341 TEUs per day in the quarter.

Global trade gridlock has slowed down imports in both Asia (excluding China) and Europe. Imports from these areas during the month actually saw significant dips at 15.2 percentage points and 11.4 percentage points, respectively. Compared with 2019, China’s import growth climbed to 28 percent, while the rest of Asia and Europe slid 22.5 percent and 14.6 percent.

Continued congestion may be at play here for these regions, while China is likely enjoying a rebound in activity from the reopening of ports like Ningbo and Yantian from their previous Covid-related closures in the summer.

In the U.S., apparel imports saw 7.8 percent growth in 2020, and generated 10.6 percent growth over 2019. Apparel is a subcategory of the overall consumer discretionary sector, which saw related imports fall 0.3 percent year over year against the surge in 2020. Consumer discretionary imports also include CPG, automotive, household durables and leisure. Meanwhile, home furnishings saw an 8.6 percent downturn in imports, according to the research unit.

One industry—industrials—carried the load for overall import growth, being the only actual category where imports grew, Panjiva said. Imports in the category jumped 4.3 percent from a year ago and 19.4 percent over 2019, with the construction (23.8 percent) and agricultural (43.8 percent) subindustries seeing the biggest surges.

The IT industry saw fewer imports in September compared with both 2019 and 2020, down 2.0 percent and 9.1 percent, respectively. Although the semiconductor subindustries reported growth amid high demand during a global shortage—with semiconductors up 84.8 percent year over year and semiconductor manufacturing equipment up 64.7 percent—communications equipment fell 21.3 percent year over year, while the hardware and components categories declined 3.8 percent and 9 percent, respectively.

The port congestion also dampened U.S. intermodal rail traffic in September, sending overall volumes lower for the month, according to the Association of American Railroads (AAR).

U.S. intermodal volumes for September were 1.33 million containers and trailers, a 6.7 percent decline from September 2020.

“Rail intermodal volume is clearly not what it has been and could be,” John T. Gray, senior vice president of AAR, said in the association’s Oct. 6 rail traffic report. “Keeping intermodal terminals functioning smoothly and at full capacity depends on consistent freight outflows to make room for new freight inflows. Unfortunately, due to limited availability of downstream truck and warehouse capacity, that’s not happening right now with predictable impacts on rail intermodal volume.”

Gray said that there was no single solution to the problem, but indicated that railroads are bringing intermodal yard capacity back online to increase storage availability as well as working with customers and truckers to accelerate container pickup.

Altogether, U.S. rail traffic was down by almost 2 percent year over year in September to nearly 2.5 million carloads and intermodal units.