U.S.-bound imports see a slower rate of decline in April, reports S&P Global Market Intelligence

Data issued this week by S&P Global Market Intelligence indicated that United States-bound imports of containerized freight declined 15% annually in April, marking the ninth consecutive month of declines.

On a year-to-date basis, April’s 15% decrease was preceded by an 11% January decrease, a 20% February decrease, and a 23% March decrease. Home furnishings imports fell 33% in April, compared to a 45% drop-off in March, and household appliances and consumer electronics saw matching 13% decreases. Textiles and apparel were off 37% annually, compared to a 37% March decrease.

In an interview, Chris Rogers, Head of Supply Chain Research, S&P Global Market Intelligence, attributed a key driver of ongoing import declines to inventory drawdowns across various sectors.

“If you look at a lot of consumer demand figures, like retail sales and so on, they're actually not too bad,” he said. “Clearly, there are a lot of retailers that have been reporting annual revenues are down anywhere between 5% and 20%. But I think I always want to be wary of some of the kind of macro numbers like U.S. retail sales, which never seem to quite pair up with what companies are reporting in terms of their actual financials.”

For example, he explained that some apparel shippers saw revenues decline around 10%-to-15% annually, partly because they are cutting prices to clear inventory. And he added that some of these shippers are contending that the inventory drawdown might almost be done or have gone too far, in some instances, for certain companies within certain verticals.

“If you look at footwear, most of the companies are in a downturn, or have been in a downturn, but one of them—Steep Mountain—said they needed to get more shoes on shelves. I imagine that in about two months we will be talking about the inventory rebuild of 2023. But, in terms of the April data, we are still seeing a big chunk of destocking going on there.”

When comparing U.S.-bound import levels between pre-pandemic up to today, he said that, for home furnishings, a key driver of goods spending and imports during the pandemic, came in 4% above pre-pandemic 2019 levels, with total April imports, at 2.3 million TEU (Twenty-Foot Equivalent Units), matching April 2019.

As for imports of other vertical industries tracked by S&P Global Market Intelligence, the firm reported the following import data for April:

• auto parts fell 14% annually and were up 8% compared to 2019;
• durables fell 27% annually and were up 6% compared to 2019;
• consumer electronics fell 13% annually and were down 14% compared to 2019;
• household appliances fell 13% annually and were up 33% compared to 2019;
• leisure products fell 26% annually and were down 4% compared to 2019; and
• textiles, apparel, and luxury goods fell 27% annually and down 8% compared to 2019

Looking ahead to the rest of 2023, Rogers said that seasonal shipping patterns, for consumer goods, appear to returning back to pre-pandemic levels, based on TEU per day.

“We are not in the peak shipping season yet, but the off-peak shipping season looks pretty much like we are back to normal,” he said. “As we go into that critical July-August period, we are watching to see if those trade patterns return to normal. Last year, we saw a lot of companies shipping early, and many companies shipped way too early, which is why there was such a slump at the back end of 2022. Our economic forecasters do expect to see a recovery in the back end of the year, with the fourth quarter expected to be up 4%-to-5% annually. That gets things back to pre-pandemic levels but not back to the boom times. There has been this discussion of if we are back to the old normal or if we are in a new normal. Unless something weird happens, we are looking at a return to the old normal.”