What it means for logistics and business
The steep slide in US imports we saw in September seems to have dissipated, if not disappeared altogether. October has brought a modicum of stability. Although the critical levels are flat on a month-to-month comparison, they are 13% less than what they were last year during the same period. That is a vastly different take from September when things seemed ominous. At the time, volumes had plummeted by double digits. The same patterns were reported regardless of whether one used August 2022 or August 2021 for comparison.
The industry feared a return to Covid-19 levels
Had the patterns continued as dreaded in September, we would now be talking about declines that exceeded those recorded before the Covid-19 pandemic. But, as it happened, October did not live down to those fears. Certainly, there has been some stabilization based on the data released by Descartes Datamyne. Indeed, the October volumes were essentially flat compared to the previous month.
That has inspired some to opine that the reversion towards pre-pandemic volumes will take longer and travel slower than previously imagined. American ports managed 2,220,331 twenty-foot equivalent units of imports in October 2022. This is a minuscule change of 0.2% compared to the previous month. Volumes were 7.2% up compared to October 2019, before the pandemic took root.
The centers of the changes in US import levels
There were significant declines in Long Beach and Los Angeles in California and Savannah, Georgia. October reported smaller drops in the respective ports. For example, Long Beach was down by 2.7% compared to September at 9,241 TEUs. Los Angeles was down 3.9% compared to September at 12,105 TEUs.
The trends in Savannah were even more striking. Hurricane Ian and the resultant closures pushed volumes down more than 20%. Yet, in October, there was an increase of 5.3% at 11,958 TEUs compared to September. Experts have described this as a special case. The data relied on for these projections and retrospective comparisons is garnered through customs filings. However, the Descartes figures differ from the official port numbers that are often released at the end of each month. Nevertheless, the trends indicate interesting patterns.
Other ports are experiencing changes too
Statistics indicate month-on-month gains in Charleston and Houston (South Carolina), Oakland (California), and Tacoma and Seattle (Washington). Perhaps the biggest surprise among all these changes were the New York and New Jersey statistics. It is pertinent to recall that these two ports had surpassed Los Angeles in terms of ranking as the busiest port in the USA. In October, that status may be called into question as they experienced drops of 6.3% compared to September at 26,972 TEUs.
Meanwhile, the delays on the East Coast remain. The good news is that they finally appear to be easing, despite still being relatively high. Many shippers have shifted traffic from the West Coast toward the Gulf and East coasts. The main reason for this shift is the enduring concern about the West Coast labor negotiations, which could go either way. In fact, a new labor contract is yet to be finalized, even though it is four months since the previous one expired.
Comparing the local and national averages
Results indicate that the bookings to the East Coast ports are outpacing the national average. However, the shift is still having an impact. For instance, there is a marked drop in vessels that are either loitering offshore or anchorage on the West Coast. Meanwhile, there is a rise in ships that are waiting for alternative coasts. The American Shipper often commissions surveys about marine traffic and ship position data and port queue lists.
These surveys indicate that the number of ships waiting off the Northern American ports has risen to 150 since January. However, they then fell below 100 in Spring. This coincided with the clearance of the queues at Long Beach and Los Angeles. Yet, in late July, there were reports of a rebound. This shift in fortunes was driven primarily by queues accumulating in the Gulf and East coasts.
Making sense of the rises and declines in volume
Inbound volumes have declined since then. Indeed, there is evidence that the queues are clearing. By mid-October, the tally was under 100. On Tuesday morning, it was reported that only 87 ships were waiting. Of that figure, 14% were on the West Coast, while the Gulf and East Coast dealt with the other 86%. Bearing in mind historical statistics, this remains a high number of ships waiting. Before the Covid-19 pandemic, the waiting list did not exceed single digits.
According to the data provided by Descartes, there is some divergence between coasts regarding experiencing and managing port delays. For instance, the average delays on the top five West Coast ports fell by about 40% in the period running from January through October 2022. By comparison, the average delays in the top ports on the Gulf and East coast fell at 50% less than pace. That means that between January and October, the other ports (apart from the West Coast ones) recorded a fall in delays of about 20%.
For context, the top 5 West Coast ports include Tacoma, Seattle, Oakland, Long Beach, and Los Angeles. The top 5 Gulf and East coast ports include Virginia, Houston and Norfolk, Charleston, Savannah, and New York or New Jersey. In the case of these statistics, delays are conceptualized as the time gap between an arrival date on the bill of lading and the time when processing is done by the US customs bill of lading.
Overall, there has been a flux in imports and the port management of those imports. Whereas some ports experienced increasing volumes, others have faced declines. Meanwhile, the extent to which delays are under control changes from port to port. Yet, the experts suggest that these declines are still high. It seems that the logistics industry and shippers have their work cut out to fully recover from the crises that have hit the industries over the last 24 months.