Tariffs continue to impact U.S.-bound shipment volumes, reports Panjiva

Data recently issued by global trade intelligence firm Panjiva showed that United States-bound waterborne shipments fell in September.

September shipments, at 1,037,316, were off 1.7% annually, and on a year-to-date basis, shipments through September, at 9,252,633, are up 1.2% compared to the first nine months of 2018.

Panjiva observed that these numbers continue to reflect the increasing told the United States-China trade war is taking on U.S. import levels. And it noted that total shipments for the third quarter rose by 0.2% annually, which marks the third quarter of slowdowns of 2019, with the first and second quarters down 2.7% and 0.8%, respectively. The firm also pointed out that containerized freight imports were up 0.6% in September and rose 1.2% in the third quarter.

China-originated shipments bound for the U.S. saw a steep annual September decline, falling 7.6%, which was a full 3% over the cumulative 4.6% decrease for the three-month period ending August 31. The firm said this tally is likely due to the impact of widening tariffs that covered $340 billion worth of imports in the 12 months to August 31 from $210 billion before the “list 4A group was issued in September.

As Panjiva has reported, other emerging markets have seen gains, with seaborne benefits from Asia-but not including China-were up 5.2% in September, with Vietnam's 21.6% September spike leading the way. But that was not the case in other regions, with U.S.-bound imports from India up 4.9% annually, down from August's 10.4% annual gain, and imports from South Korea off 4.2% in September, following a 15% annual gain. Panjiva said these sequential declines may be an indication of underlying demand becoming less robust while China-replacement activity moves on.

Looking at shipment category, Panjiva said apparel imports were off 0.1% in September after a 7.5% cumulative gain from July through August, with Panjiva explaining that a large amount of the sector is exposed to tariffs and the slower growth seen in September showing the level of previously stockpiling. Toy imports headed up 11.5% in September, and Panjiva said that tariffs will not impact toys until mid-December, with the caveat that it is contingent on how U.S.-China trade negotiations progress.

On the industrial side, chemical shipments dropped 9.9%, with steel imports off 8.4%, and broad capital goods falling 4.4%.

In an interview, Panjiva Research Director Chris Rogers explained that from a fundamental perspective, it comes as no surprise that the U.S.-China trade war is, and continues to represent, a major driver of trade activity.

“In September, we had the first round of the so called ‘List 4' tariffs, and it is now a question of what is going to happen next, in terms of if all products are going to be covered or a stepping back in the trade war, which is in the hands of negotiators at the moment,” he said. “There are some countries doing well at the expense of China, with Vietnam being the most obvious one. That presents a partial offset for logistics services providers, in that they will need to rearrange some of their services while being cognizant of the fact that things are slowing down broadly…on a global level as it relates to exports. That makes it pretty clear that the trade war is not the only game in town, when it comes to things impacting global shipping activity.”

Looking ahead at the coming months, Rogers said the global trade environment is a complicated picture with lots of moving parts.

From a fundamental perspective, he said that total U.S.-bound waterborne shipments—based on what has happened over the first nine months of 2019—are likely to see any type of meaningful growth.

“While there is currently a standstill with U.S.-China tariffs, that does not mean they re going away or that there will be a rollback,” he noted. “That headwind is still there. Business sentiment surveys were also very negative in September. There is still hope that consumers will come out and spend for the holidays. A rollback of tariffs could help to get things going, but that seems unlikely at this stage. An improvement in U.S. relations with Europe could help. But the single biggest item as for what will drive trade is the decision to be made by President Trump for automotive tariffs, as part of Section 232 national security tariffs, which would particularly apply to Europe and China but not to Japan, Mexico, Canada, and South Korea. It would still be a sign that the administration very much has a taste for protectionism and increasing it going forward.”

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