Shipping surge flows into February; Biden's pharma supply chain targets

The Supply Chain Daily provides a curated overview of Panjiva's research and insights covering global trade policy, the logistics sector and industrial supply chains and draws from global shipping and freight data.

Shipping surge extends into February as consumer, pandemic needs remain high

The surge in U.S. inbound shipping continued in February, with total seaborne imports up 29.3% year over year while containerized freight improved 20.0%. Both are somewhat distorted by the timing of the Lunar New Year holiday in 2020, although growth for January and February combined in containerized freight was a still considerable 17.9%.

That provides little reprieve for hard-pressed logistics operators who are still working through earlier backlogs. Shipments from China rose 36.0% year over year in January and February combined, while those from Asia excluding China rose 7.2%. There was a 39.1% slide in shipments from Japan, in part due to lower shipments linked to the auto industry.

At the industry level, consumer discretionary sector imports led with 31.8% growth in the first two months of the year. That supports National Retail Federation expectations that shipments in the first half of the year could rise 24.4%.

Shipments of consumer electronics rose 28.5%, while home furnishings increased 41.8%. Healthcare and consumer staples continued to be driven by the coronavirus pandemic. The industrial sector also remained robust, with growth of 19.2% in February alone.

(Panjiva Research – Logistics)

Biden's pharma study may focus on Chinese glycoside, vial supplies

The Biden administration has launched a review of critical U.S. supply chains including active pharmaceutical ingredients, or APIs, that is due to report in early June. That has led Amneal Pharmaceuticals Inc. to consider having "at least 35% to 40% capabilities and capacity" in the U.S., according to co-CEO Chirag Patel.

U.S. imports of APIs across all medicines rose 7.9% year over year in the three months to Jan. 31, with U.S. allies leading supplies. Suppliers from the EU accounted for 56.5% of the total in 2020 with a further 19.5% from Switzerland, the U.K. and India. China accounted for 15.3% of the total, rising to 70.8% of glycosides and 58.9% of lactones.

APIs are not the only concern with regards to COVID-19 vaccines. Supply security of basic chemicals, bottles and syringes may also be a factor. China accounted for 12.3% of those products in total, including 28.8% of imports of glass vials. Imports of those glass products by sea climbed 25.0% year over year in February, including shipments by the Chinese subsidiaries of Gerresheimer AG and Thermo Fisher Scientific Inc., among others.

(Panjiva Research – Healthcare)

H&M slashes shipments from Myanmar after coup

H & M Hennes & Mauritz AB (publ) has "paused placing new orders with [its] suppliers" in Myanmar after violence following the military coup led to "challenges related to manufacturing and infrastructure, raw material imports and transport of finished goods."

Myanmar only accounted for 5.7% of U.S. seaborne imports linked to H&M, though shipments have already been cut back with an 80.5% year-over-year drop in February. Total U.S. seaborne imports of apparel from Myanmar dipped 5.7%, with H&M's cutback offset by a surge in shipments linked to adidas AG and Wittington Investments Ltd.

(Panjiva Research – Consumer Discretionary)

CMPC feels a sense of paper supply chain emptiness

Empresas CMPC SA reported a 2.7% year-over-year increase in revenues for the fourth quarter of 2020 after the pulp and paper manufacturer's volumes sold soared but its achieved prices slumped. The company faces logistics challenges in the new year. Raimundo Varela Labbé, CEO of CMPC's pulp business, has said that "congestion and this delay in shipments is affecting raw materials and creating a sense of emptiness in the supply chain."

U.S. seaborne imports linked to CMPC have been highly volatile, slumping 31.2% year over year in January before climbing 75.3% in February. Wood pump imports linked to the company have been growing more steadily, driven by demand for paper goods in the U.S. during the pandemic. 

Total U.S. seaborne imports of wood pulp have nonetheless been in decline, with a 16.5% drop in January and February combined. That has been led by Canadian pulp suppliers, with shipments linked to Paper Excellence BV and Millar Western Industries Ltd. down by 50.7% and 41.1%, respectively.

(Panjiva Research – Industrials)

Adient, Brose seat supplies in decline as plastics crunch looms

The North American automotive industry may face a supply crunch in car/truck seats after Texan petrochemical refineries closed during winter storms in February, cutting supplies of plastics for foam and seat covers. 

That comes at the same time as a shortage of semiconductors. The shortage of foam is not a new challenge though, as previously flagged by Adient PLC in December 2020. 

U.S. imports of car seats have been steadily increasing, with growth of 19.3% year over year in the fourth quarter of 2020 and rose by a further 25.1% in January. Exports from Mexico are in decline, with a drop of 35.0% year over year in January. That included a 32.8% slide in shipments linked to Adient and a 41.4% drop in exports by Brose.

(Panjiva Research – Autos)

Christopher Rogers and Eric Oak are researchers at Panjiva, 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.

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