October U.S. Container Import Volumes Remain Constant, but Port Delays Continue to Recede

U.S. container import volumes in October were consistent with September while delays at most ports continued to decline. Key economic indicators such as the growth of the economy, jobs, inflation, interest rates and fuel costs paint a conflicting picture of their impact on the future direction of U.S. container import volumes. Chinese imports again declined and had the greatest effect on the two major West Coast ports. The October update of the logistics metrics Descartes is tracking shows the potential for relief but continues to point to congested and challenging global supply chain performance for the rest of 2022.

October 2022 U.S. container import volumes were up marginally (0.2%) to 2,220,331 compared to September 2022 (see Figure 1). Versus October 2021, volume was down 13.0%, but still 7.2% higher than pre-pandemic 2019. Comparing fall imports in 2022 to the previous six years, October would have been expected to be higher than September, but that did not happen. However, it is too early to say whether container imports will follow previous end-of-year declines.

Figure 1: U.S. Container Import Volume Year-over-Year Comparison

Source: Descartes Datamyne™

Only four of the top 10 U.S. ports saw a volume decline (see Figure 2). The Ports of New York/New Jersey, Long Beach, and Los Angeles experienced the greatest decline, respectively. The Port of Savannah had the greatest volume increase, partially attributed to it rebounding from the negative effect of Hurricane Ian in September.

Figure 2: September to October Comparison of Import Volumes at Top 10 U.S. Ports

Source: Descartes Datamyne™ 

The downward trend continued in October for U.S. container imports from China to 775,258, a reduction of 5.5% versus September and down 22.8% from the 2022 high in August. China represented 34.9% of the total U.S. container imports, a decline of 6.6% from the high of 41.5% in February 2022. Of the top 10 countries importing into the U.S., only India on a percentage basis fared worse in October versus September (see Figure 3).

Figure 3: September to October Comparison of U.S. Import Volumes from Top 10 Countries of Origin

Source: Descartes Datamyne™ 

In October, East and Gulf Coast ports expanded their lead in volume over West Coast ports versus September 2022, and their overall share of imports was much higher. Comparing the top five West Coast ports to the top five East and Gulf Coast ports in October 2022 versus September 2022 shows that, of the total import container volume, the East declined slightly in October to 47.9%, down 0.3% over September, and the West decreased again to 36.4% in October from 37.0% in September. The top 10 ports lost some share in October 2022 to smaller ports, as the top 10 represented 84.3% of all volume compared with 85.2% in September 2022 and 87.3% year-on-year.

The Ports of Los Angeles and Long Beach experienced the greatest impact of declining Chinese imports. Compared to September 2022, October U.S. import container volume for the Ports of Los Angeles and Long Beach decreased by 8.1% and 7.1%, respectively and the October year-over-year declines were 48.0% and 31.6%, respectively.

Looking at five-month periods (see Figure 4), the top West Coast ports (orange) experienced container throughput shifts to other ports, including the East and Gulf Coasts (blue). The Port of New York/New Jersey remained in the top spot at 400,663 TEUs in October 2022. The Port of Los Angeles came in second at 329,785 TEUs and Long Beach was third at 300,914 TEUs.

Figure 4: Container Import Volume Shifts at the Top 10 Ports  

Source: Descartes Datamyne

Overall port delays in October 2022 were lower than September 2022 (See Figure 5). The major West Coast ports are all below 10 days and the Ports of Los Angeles and Long Beach are in the six-day range. Much of the progress can be attributed to the reduction in volume that these two West Coast ports are experiencing. Delays at all the major East and Gulf Coast ports improved but are still extended versus the major West Coast ports.

Figure 5: Monthly Average Delays (in days) at Top 10 Ports

Source: Descartes Datamyne
Note: Descartes’ definition of port delay is the difference as measured in days between the Estimated Arrival Date, which is initially declared on the bill of lading, and the date when Descartes receives the CBP-processed bill of lading.

The labor situation remains unchanged and presents continued risk to West Coast port operations. The International Longshore and Warehouse Union (ILWU) contract expired on July 1st; however, business has proceeded as usual with the union working with management. Until now there has been no impact on container processing as has been the case in the past. However, ILWU walked off the job at the Port of Oakland on November 2, effectively shutting down the port for two-plus days. The executive director of the Port of Los Angeles commented that it may be several months before there is an agreement. California law AB5 still remains a significant issue with no resolution in sight and there is a risk that more AB5-related stoppages could occur in other California ports in the future causing greater disruption. The continuing labor uncertainty could be a significant reason why import volumes are not shifting back to major California ports despite their situation improving.

The Chinese government continues its zero-COVID tolerance policy, which has the potential to disrupt global supply chains in part or more broadly. For instance, there was a lockdown of the area around Foxconn Technology which makes Apple iPhones. The lockdown began on November 2 and is scheduled for 7 days; however, lifting restrictions will be dependent upon the success in eliminating COVID cases. 

Key economic indicators provide a mixed view of the economy and, ultimately demand for imports. The economy grew slightly in the third quarter versus the second quarter and employment increased by 216,000 jobs; unemployment is still close to record levels at 3.7%. Inflation remains high, however, and the Federal Reserve again raised interest rates by 0.75% to help curb inflation. According to the U.S. Energy Information Association, gasoline costs, a significant contributor to high inflation rates, remained consistent in October with September, but diesel increased $0.48 to $5.31/gallon. Both are still high and likely to remain elevated for the foreseeable future given the disruption of global energy markets as a result of the Russian invasion of Ukraine, subsequent sanctions on Russia and recent steps by OPEC to curtail production.

U.S. import volume stabilized in October and now the question for the rest of 2022 is whether or not decreases will continue through the end of the year. In addition, several significant one-time events could exacerbate the ability to move goods globally. Here’s what Descartes will be watching:

• Monthly TEU volumes between 2.4M and 2.6M. This level will continue to stress ports and inland logistics until infrastructure can be enhanced. October U.S. container import volume remained at 2.2M TEU.
• Port wait times. If they decrease, it’s an indication of improved port processing capabilities or that the demand for goods and logistics services is declining. Port wait times were down slightly again in October but were still much higher on the East and Gulf Coast ports.  
• Continuing impact of the pandemic. The spread of COVID subvariants continues to add uncertainty to the trajectory of the pandemic and impact supply chains in unpredictable ways as different countries are affected at different times and for different durations. China is still maintaining its strict rules and there are lockdowns that are impacting some supply chains.  
• Key economic indicators such as the inflation rate, monthly BLS Jobs Report, FRED Inventory to Sales Ratio and FRED Personal Consumption Expenditure: Durable Goods. A fundamental change in consumer buying behavior from services to goods occurred early in the pandemic and was the force behind the dramatic increase in U.S. container import volumes over the last two years. The October numbers for the economy and jobs are still contrary to the expected impact of high inflation figures and fuel prices.
• ILWU contract negotiations. The ILWU contract has expired, but to date there hasn’t been an impact on West Coast port operations; however, California AB5 has the potential to cause more disruptions to California port operations. There have been some localized disputes with the ILWU and no indication of a date for an agreement.
• Inflation and the Russia/Ukraine conflict. Inflation may be the only way to slow down the strong U.S. economy and ultimately help to alleviate the global logistics capacity-related problems that exist. Inflation remained high in October and diesel costs increased. Both diesel and gas prices remain high due to the effect of the Russia/Ukraine conflict and now OPEC.

October 2022 U.S. container import volumes were consistent with September and didn’t provide an indication of how the rest of the year will unfold. The U.S. economy remains relatively strong despite numerous pressures to slow it down. Overall, ports are continuing to process large volumes of containers. The reduction in port delays was more widespread. While West Coast ports are looking less constrained, especially due to the reduction in Chinese imports, labor-related issues are not yet incenting importers to move volume back. This data reaffirms that it will be some time before the pressure on supply chains and logistics operations begins to lift. Descartes will continue to highlight key Descartes Datamyne, U.S. government and industry data in the coming months to provide insight into the global shipping crisis. We are staying the course with our current perspectives and recommendations:

Short-term: 

• Monitor the impact of California law AB5 on owner-operators serving California ports for potential disruption or degradation of port container processing performance.
• Monitor ILWU contract negotiations for progress.
• Track the spread of COVID variants to determine when they will hit critical parts of the supply chain, especially in China and other countries with severe containment policies.
• Track ocean shipments as increasing port delays and number of ships waiting off ports makes managing supply chains more difficult.
• Watch port delays on the East and Gulf Coasts. 
• Evaluate the impact of inflation and the Russia/Ukraine conflict on logistics costs and capacity constraints. Ensure that key trading partners are not on sanctions lists.
• Focus on keeping the supply chain resources you have, especially drivers. The old adage “a bird in the hand is worth more than two in the bush” definitely applies here. Building trips to reduce stress and improve quality of life to retain drivers is now as or more important than wage increases.

Near-term:  

• Reevaluate the flow of goods as major East and Gulf Coast ports are still experiencing greater delays and the Ports of Los Angeles and Long Beach are seeing significant reductions in wait times.
• Continue to look for less congested transportation lanes, including smaller ports, to improve supply chain velocity and reliability. Total transit time is important, but so is supply chain predictability. Evaluate alternative transportation lanes into the U.S., including entry through northern and southern borders and inland ports.

Long-term:  

• Evaluate supplier and factory location density to mitigate reliance on over-taxed trade lanes and regions of the globe that have the potential for conflict. Density creates economy of scale but also risk, and the pandemic and subsequent logistics capacity crisis highlights the downside. Conflicts do not happen “overnight” so now is the time to address this potentially business disrupting issue.

Note: This report uses the initial compiled release of U.S. Customs and Border Protection (CBP) data and is subject to later revision by CBP. The revised data can be seen in Descartes Datamyne.