If global supply chains were a precision instrument, container throughput would be its most vital performance indicator. When this metric shows a sudden decline, should we be concerned about an impending economic chill? The latest global shipping report from Descartes serves as a sobering health check, revealing a significant drop in U.S. container imports that speaks volumes about shifting trade patterns and economic trends.
Key Findings: Sharp Decline in U.S. Imports
Descartes, a Canadian logistics software provider based in Waterloo, Ontario, released its 20th monthly global shipping report for March. The data shows U.S. container imports fell substantially in February, though volumes remain comparable to pre-pandemic 2019 levels:
- Month-over-month drop: February imports totaled 1,734,272 TEU (twenty-foot equivalent units), down 16.2% from January.
- Year-over-year decline: Volumes decreased 25.0% compared to February 2022.
- Pre-pandemic comparison: Just 0.3% below February 2019 levels, indicating relative stability.
Multiple Factors Behind the Decline
Descartes identified several contributing factors to February's import slowdown:
- Calendar differences: February's 28-day duration (three days shorter than January) naturally affects total throughput.
- Lunar New Year impact: The Chinese holiday typically slows production and shipping, with effects visible in late February and early March.
- Historical context: Excluding early 2020's pandemic onset, February 2023 saw the largest monthly decline in seven years, second only to February 2020's 17.9% drop.
Chris Jones, Descartes' executive vice president of industry, noted: "While February imports typically decline from January, increased port transit times alongside falling volumes suggest supply chain performance remains unstable despite 2023 volumes mirroring 2019 levels."
Port Congestion Worsens Amid Supply Chain Challenges
The report reveals that while imports declined, delays at major U.S. West Coast, East Coast, and Gulf Coast ports actually increased. Imports from China and other key exporters fell simultaneously. Ongoing COVID-19 impacts and West Coast labor disputes continue injecting uncertainty into supply chains.
Diverging Port Performance: Los Angeles Leads Declines
Among America's top 10 ports, February imports collectively decreased by 296,390 TEU. Only Tacoma saw growth (8% or 4,169 TEU), while Los Angeles recorded the steepest decline—down 32% (118,442 TEU) from January.
Coastal Market Share Stabilization
East Coast and Gulf Coast ports gained 1.6 percentage points in market share (now 48.6%), while West Coast ports fell to 36.0%—their lowest share in a year. Smaller ports also gained ground, with the top 10 ports' combined share dropping to 82.8%, the lowest since mid-2022.
Expert Perspective: Cautious Optimism About 2019-Level Recovery
Chris Jones observed that current throughput levels resemble 2019, which he finds both encouraging and expected, noting January's 7.2% monthly growth reinforced this trend. "While economic pessimism prevails," Jones said, "U.S. GDP grew 2.9% in Q4 2022—a fairly robust performance."
Deeper Analysis: What the Data Reveals
Beyond surface-level statistics, Descartes' report illuminates critical economic dynamics:
1. Weak Demand: The import slump primarily reflects softening U.S. consumer demand amid high inflation, rising interest rates, and recession fears, with businesses reducing inventories accordingly.
2. Easing Supply Bottlenecks: While port delays persist, their gradual improvement suggests pandemic-related disruptions are subsiding, though risks remain.
3. Shifting Trade Patterns: West Coast ports' declining share reflects both labor tensions and growing U.S. trade with non-Asian partners, elevating East Coast and Gulf ports' importance.
4. Small Ports Rising: Their growing market share indicates shippers diversifying to less congested, often more efficient alternatives, enhancing overall supply chain resilience.
5. The 2019 Benchmark: Matching pre-pandemic volumes doesn't guarantee economic health—2019 itself saw slowing growth amid trade tensions and geopolitical risks.
Strategic Responses for Businesses
In this volatile trade environment, companies should consider:
- Diversifying supply chains to reduce regional dependencies
- Optimizing inventory management through advanced forecasting
- Monitoring policy changes to adapt strategies promptly
- Implementing digital tools to enhance supply chain visibility
- Strengthening risk assessment frameworks
As global trade navigates uncertain currents, businesses must balance cautious optimism with proactive preparation—leveraging data insights like those in Descartes' report to steer through potential challenges ahead.