Record October imports as US holiday shopping shipped early — Panjiva
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Record October imports as US holiday shopping shipped early

Cons. Discr. - Retailing 419 U.S. 5221

U.S. imports by volume increased by 2.7% year over year in October based on preliminary data collected by Panjiva, continuing to indicate that logistics networks are running flat out. U.S. import networks are at capacity, as noted in Panjiva’s Q4’21 Outlook, bringing with it much of the congestion and supply chain issues faced by companies this year. The challenge with congestion is that while imports are at record highs — up by 20.5% compared to 2019 — individual companies are seeing longer lead times for goods, which then incites increased and early ordering. This can turn into a cycle where congestion in logistics drives further traffic from companies trying to hedge risk by ordering additional supplies.

October is a pivotal month for holiday-focused supply chains. Companies that want to stock shelves by Thanksgiving often need to import by October to allow goods to pass through inland networks. If any additional capacity was to be found, this was the most likely period to appear, but companies have had all year to prepare for this period and sustained imports in previous months could mean that many businesses shipped earlier than usual. That may pose a problem for consumers shopping for a specific present, or manufacturers that have run out of a specific item, as replacements may not make it in time.

October imports match year long peak season

Chart shows imports to the U.S. by TEU per day on a monthly basis. Source: Panjiva

Panjiva data shows that sectors with increased imports compared to both 2020 and 2019 indicate relative success in handling increasingly complex supply chain challenges. These include energy, which saw imports increase by 46.3% year over year and by 42.4% from 2019. Surging energy prices and demand seen across much of the world likely contributed to the growth, with natural gas prices up by 89.7% year over year, according to Capital IQ. Industrials also saw imports improve by 4.4% from 2020 and by 22.6% against 2019.

In the chart below, the upper left quadrant shows sectors whose import performance increased versus 2019, benefiting from post-lockdown surges in demand, but declined compared to 2020 due to the impact of supply chain issues. Companies in these sectors may have used strategies to mitigate the crisis, like shipping earlier than usual, as associated imports rose year over year in the July-October period. The materials, consumer discretionary and IT industries are part of this category, increasing by 3.4%, 3.5% and 5.9% year over year respectively in those four months. Overall, this means the sectors may have enough goods but may also have to bear an increase in inventories if stocks don’t sell until the holiday season.

Imports in healthcare and consumer staples fell by 13.1% and 20.9% year over year respectively against October last year. Both segments also saw July-October imports decline by 15.8% and 14.0% year over year respectively. These sectors saw exceptional activity during and after coronavirus-related restrictions in 2020, as businesses and consumers stocked up on PPE and other personal care products. The surge was driven by uncertainty over COVID-19, which has largely faded as the country grapples with new conditions.

U.S. importers shift shipments forward

Chart shows U.S. imports by industry on a year over year basis. Color for emphasis. Source: Panjiva

Leisure goods, especially toys, are of particular interest in the lead-up to the holiday season. Many toy retailers depend on this timeframe for a large percentage of their sales.

Imports of toys fell by 1.3% year over year in October, but that figure hides what is likely an effort to ship goods early, with imports up by 14.1% in the first four months of the second half and and by 7.2% versus October 2019. Imports of leisure goods other than toys — such as exercise equipment and video games —performed better, increasing by 9.0% year over year in October and by 32.1% in the four-month period. Imports versus October 2019 also grew by 62.3%, which could mean companies in this category shifted imports earlier and are gearing up for a strong holiday season.

Toy imports arrived early

Chart shows imports of toys and leisure products on a year over year monthly basis. Source: Panjiva

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