This week:

• West Coast ports and container terminals see a return to pre-covid container volumes as they process the pre-Lunar New Year rush 
• US container import flows show changes as US shippers order more from Vietnam, India, and other countries 
• Delays and problems for Indian shippers exporting to the US as Suez Canal complications reduce space availability and increase lead times 
• Port of NY-NJ reports no port congestion, just delays, due to Suez Canal situation 
• The Chinese share of US ocean containerized imports fell below 40% last year, the first time since 2013 

Terminals at LA-LB and Along West Coast Return to Pre-Covid Container Volumes

Data from SSA Containers reported that Los Angeles-Long Beach is operating at 70% capacity utilization this season, with other ports such as Oakland and Seattle-Tacoma operating at 60%. After last year, when many retailers shifted to the East and Gulf Coasts to avoid delays from labor contract negotiations, many West Coast ports are now prepared for a shift back without serious congestion issues this year.

A shift back to the West may be possible if situations ease in the Panama and Suez canals.

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Changing Trends in US Container Import Flows

While the US’s second-largest source of container volumes, Vietnam, didn’t see any change in its export volumes to the US between 2022 and 2023, holding out at 8.7%, volumes have risen considerably from 2013’s 3.3%. Imports from India last year made up 4.1% of total US imports from 3.9%, showing a slow but gradual increase after reaching the 3% mark in 2018.

In the five years before the pandemic, US import volumes experienced an average 4.5% annual growth in container volumes. However, growth projections for this year remain modest as many retailers and shippers continue to move away from China’s production power in favor of more resilient supply chains.

Low Vessel Capacity from Red Sea Crisis Hits India-US Cargo Movement

Due to carriers making longer voyages to avoid vessel attacks in the Red Sea, recent imports to the US from India have been delayed by between 10 and 15 days. Rates from India to the US East Coast have also risen sharply, reaching $4,700/FEU on January 30 from just $3,000/FEU one month prior. Hapag-Lloyd has also announced a $1,000 hike in its container prices that will come in on March 1.

Suez Canal Diversions Cause Delays but No Congestion at NY-NJ

The Port Authority of New York and New Jersey (PANYNJ) still expects the port to see regular cargo volumes this year with a projected 3% growth, but the effects of the Suez and Panama Canals may still impact the port.

Chinese Share in US Imports Dropped Under 40% Last Year

While there is more than one reason why many US retailers and shippers are moving away from Chinese sources, one of the core reasons focuses on trying to prevent the severe supply chain bottlenecks and backlogs seen over the pandemic from happening again to the same extent. Moving the US import market to countries such as India, Vietnam, South Korea, and Germany is a bid to reduce US reliance on a single source for improved resiliency.

Tension between the US and China has also led many US importers to reduce how much they order from Taiwan should a conflict occur between China, Taiwan, and the US. Taiwan made up 2.5% of US imports last year, compared with 2.9% in 2021.

In total, US imports last year dropped 12.9% from 2022 to approximately 24.2 million TEUs.