June U.S. Container Import Volumes Decrease from May, but Pull Ahead of 2019 Performance

In June 2023, U.S. container import volumes decreased slightly compared to May 2023. Although the decline was not as much as in previous years, volumes were higher than pre-pandemic 2019. Port transit times decreased to the lowest levels since Descartes began tracking them. The U.S. West Coast labor situation appears to be resolved with a tentative agreement between the parties, but the major Canadian West Coast ports are in the throes of a strike. The July update of the logistics metrics Descartes is tracking shows slightly stronger import volume performance than previous years and signs that key challenges to global supply chain performance in 2023, such as U.S. West Coast labor relations and port transit time delays, continue to improve. 

June 2023 U.S. container import volumes decreased 0.7% from May 2023 to 2,081,793 TEUs (see Figure 1). Versus June 2022, TEU volume was down 16.1%, but up 6.0% from pre-pandemic June 2019. Unlike the first four months of 2023, the growth in import volume in June accelerated past 2019 volumes by 2.1% for the same period in each year.

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

Source: Descartes Datamyne™

Examining the increase in import volumes from May to June in the previous six years, apart from 2020, which was an anomaly, June 2023 volumes show the lowest decrease from May of the same year (see Figure 2).

Figure 2: May to June U.S. Container Import Volume Comparison

Source: Descartes Datamyne™ 

For the top 10 ports, overall U.S. container import volume in June 2023 was down very slightly (12 TEUs) versus May (see Figure 3) with seven of the ten reporting decreases. The Port of Los Angeles showed the greatest overall container volume increase (32,486 TEUs), but the Port of Long Beach had the greatest percentage decrease (-15,294).

Figure 3: May to June Comparison of Import Volumes at Top 10 U.S. Ports

Source: Descartes Datamyne™ 

Chinese imports in June 2023 increased very slightly, climbing 0.3% over May 2023 to 783,019 TEUs, but still down 22.0% from the August 2022 high (see Figure 4). China represented 37.6% of the total U.S. container imports in June, an increase of 0.4% from May, but still down 3.9% from the high of 41.5% in February 2022.

Figure 4: June 2022–June 2023 Comparison of U.S. Total and Chinese TEU Container Volume

Source: Descartes Datamyne

For the top 10 countries of origin (CoO), U.S. container import volume in June 2023 increased 0.9% (13,191 TEUs) with Vietnam having the greatest overall increase (4,865 TEUs) and Italy having the greatest percentage increase at 9.6% (see Figure 5)

Figure 5: May to June Comparison of U.S. Import Volumes from Top 10 Countries of Origin

Source: Descartes Datamyne

In June 2023, the volume share at top West Coast ports grew again edging past top East and Gulf ports whose share retreated—a first since March 2022. Comparing the top five West Coast ports to the top five East and Gulf Coast ports in June 2023 versus May 2023 shows that, of the total import container volume, top West Coast ports increased to 42.4% (up 0.9%) and top East and Gulf Coast ports decreased to 42.3% (down 0.5%). Compared to smaller ports, the top 10 ports share in June 2023 grew to 84.8%, up 0.5% versus May 2023 (see Figure 6).

Figure 6: Volume Analysis for Top Ports, West Coast Ports and East and Gulf Coast Ports

Source: Descartes Datamyne

In June 2023, overall port transit delays were much shorter compared to May 2023 (see Figure 7) and are the lowest they have been since Descartes started tracking them. The Port of Los Angeles saw the greatest reduction which is counter intuitive given the job actions in June by the International Longshore and Warehouse Union (ILWU).

Figure 7: Monthly Average Transit Delays (in days) for the Top 10 Ports

Source: Descartes Datamyne™

Note: Descartes’ definition of port transit 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 International Longshore and Warehouse Union (ILWU) and Pacific Maritime Association announced they reached a tentative agreement. The contract spans six years, but still needs to be ratified before it can take effect. Since the announcement, job actions by the U.S portion of the union have ceased. In the meantime, the ILWU at the Canadian West Coast ports of Vancouver and Price Rupert are on strike as of the beginning of July and could impact U.S. container imports in July.  Panama, however, has experienced a drought this year and the result has been a restriction in the number of ships passing through the canal and in the volume that ships can carry. Recent rains have helped to alleviate the situation, but the Panama Canal authority has stated that restrictions will remain in place as long as the drought persists. 

According to the U.S. Energy Information Administration, gasoline costs, a significant contributor to high inflation rates, remained stable at $3.53/gallon in June 2023, down $1.24/gallon from June 2022. Diesel costs were also down slightly to $3.77/gallon this month and down $1.91/gallon from June 2022. The continued diesel decline is good news, but both are likely to remain elevated for the foreseeable future given the disruption of global energy markets because of the war in Ukraine and subsequent sanctions on Russia. 

U.S. container import volume decreased very slightly in June while moving ahead of 2019 numbers, and there are positive signs that point to less supply chain turbulence. Here’s what Descartes will be watching to see if global supply chain performance will continue to improve:

• Monthly TEU volumes between 2.4M and 2.6M. This level will continue to stress ports and inland logistics until infrastructure can be enhanced. June U.S. container import volumes are slightly ahead of 2019 levels, but significantly below this range. 
• Port transit wait times. If they decrease, it’s an indication of improved global supply chain efficiencies capabilities or that the demand for goods and logistics services is declining. June port wait times across all major ports decreased closer to April levels.   
• 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. COVID is still with us but having less impact on supply chain and logistics resources and supply chain performance variability.   
• ILWU contract negotiations. The ILWU contract has expired, but to date there hasn’t been an impact on U.S. West Coast port operations; however, California AB5 has the potential to cause more disruptions to California port operations. The International Longshore and Warehouse Union (ILWU) and Pacific Maritime Association announced they reached a tentative agreement, but it still needs to be ratified. 
• 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. The latest Consumer Price Index report available (May 2023) shows a slight increase in inflation (0.1%) and it is still higher than the U.S. Federal Reserve’s target of 2%. Diesel and gas prices have declined slightly yet both remain elevated because of the Russia/Ukraine conflict. 

June 2023, U.S. container import volumes were down slightly versus May 2023, but have moved ahead of pre-pandemic 2019 numbers. Port transit times in June returned to lower April levels. The U.S. West Coast labor situation appears to be resolved which could facilitate a return of some of the volume that moved to Gulf and East Coast ports; however, the drought situation in the Panama Canal may hasten that return. This data reaffirms that the pressure on supply chains and logistics operations is continuing to lift, but there are still issues that can cause further disruptions. Descartes will continue to highlight key Descartes Datamyne, U.S. government and industry data in the coming months to provide insight into global shipping. 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 ratification.  
• Track the spread of COVID variants to determine when they will hit critical parts of the supply chain, especially in China. 
• Track ocean shipments and carrier performance as there is still a considerable gap between original ETAs and actual ones.   
• 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:  

• Continue to look at alternate transportation lanes, including smaller ports, to improve supply chain velocity and resiliency. 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 revision later by CBP. The revised data can be seen in Descartes Datamyne.