Record Drop for U.S. Container Imports

Shipping containers were unloaded from vessels at a terminal in the Port of Long Beach-Port of Los Angeles complex in Los Angeles, California, on April 7, 2021, during the COVID-19 pandemic.

The top ten container ports in the U.S. experienced their largest monthly decline on record in February, reflecting the significant boom-and-bust cycle triggered by the pandemic. Inbound container volumes dropped a staggering 28% last month, marking a notable decline compared to January’s 17% decrease and continuing a trend of five consecutive months of double-digit declines, according to industry veteran John McCown in his latest report on U.S. ports.

McCown noted that the stark contrast to last year's exceptional year-over-year increases is now resulting in unprecedented declines, which he expects to persist for several months.

February’s volumes correspond to a negative 1.4% compound annual growth rate (CAGR) when compared to pre-pandemic levels in February 2019 and just a 1% CAGR since 2017, before the impacts of former President Trump's trade war tariffs on China. Both figures are significantly below the 3.8% ten-year CAGR in annual inbound shipments from 2010 to 2020, excluding pandemic-related gains.

In February, East Coast and Gulf Coast ports outperformed their West Coast counterparts in terms of percentage change for the 21st consecutive month, as ongoing labor disputes on the West Coast continue to affect inbound volumes, according to McCown.

However, there was some positive news for exporters, as outbound volumes increased by 4.6% following double-digit gains in January and December. This marked the seventh consecutive month where outbound volume growth surpassed inbound volume growth, reversing a trend of underperformance that lasted 26 months.

McCown also addressed misconceptions regarding pricing levels and trends in container shipping and maritime supply chains. He specifically referenced the New York Fed's Global Supply Chain Pressure Index (GSCPI), which he argues offers an "imperfect estimate" partly due to its reliance on spot indices that do not accurately reflect the container shipping industry.

According to recent reports, the GSCPI indicated that global supply chain pressures significantly decreased in February and turned negative—the lowest reading since August 2019—suggesting a return to normal conditions in global supply chains.

McCown criticized the GSCPI for being linked to a spot index that is not a reliable measure of actual inflation in the container sector or supply chain pressures, suggesting that it is misleadingly indicating lower supply chain pricing compared to pre-pandemic levels