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No rest for stressed logistics networks as off-peak season looks elusive

There was no respite for logistics firms operating U.S. inbound shipping services in May. Panjiva's data shows U.S. seaborne imports of containerized freight climbed 47.1% year over year and by 18.3% compared to May 2019.

While the latter was slower than the growth seen in March and April, the average daily shipments of 97,100 twenty-foot equivalent units, or TEUs, were second only to April's 97,700 TEUs as ports worked through both existing congestion and continued growth in underlying demand. Both were still well above the 91,460 TEU average handling in the peak season (three months to Nov. 30) of 2020.

The expansion in shipments has once again been led by shipments from China, with growth of 51.2% year over year in May and of 27.4% compared to May 2019. Further challenges lie ahead given the congestion issues caused by a renewed surge in the pandemic in China, as discussed in Panjiva's research of June 14.

Shipments from the rest of the world still showed considerable growth with imports from Europe up by 34.6% year over year and by 10.6% compared to 2019. Those from Asia excluding China increased 44.5% year over year and by 13.1% versus 2019. There is some evidence of crowding out, though, with imports from the world excluding Asia and Europe down 9.3% compared to May 2019.

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The continued, elevated levels of shipping are particularly evident in the consumer sectors, with imports of consumer discretionary goods up 88.2% year over year and by 32.9% compared to 2019 in May. Hard lines have been particularly strong, with shipments of consumer electronics and household appliances up 10.9% and 62.2%, respectively, in May 2021 versus May 2019, while shipments of apparel rose by a more modest 4.4%. Overall, it's perhaps not a surprise that the National Retail Federation has increased its forecast for sales growth in 2021 to 10.5%-13.5% year over year from a prior estimate of 6.5%.

One area of slowing shipments lies in the materials sector. Shipments fell 1.4% in May 2021 versus May 2019 even though year-over-year growth reached 18.0% — the lowest of the big seven sectors tracked by Panjiva. The decline has been most noticeable in the paper, packaging and forestry products sector, with a contraction of 9.8% compared to May 2019. That would suggest upward pressure on supply chain costs in both the packaging/e-commerce and construction sectors may remain elevated.

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Christopher Rogers is a senior researcher at Panjiva, which is a business line of S&P Global Market Intelligence, a division of S&P Global Inc. This content does not constitute investment advice, and the views and opinions expressed in this piece are those of the author and do not necessarily represent the views of S&P Global Market Intelligence. Links are current at the time of publication. S&P Global Market Intelligence is not responsible if those links are unavailable later.