Ocean Contain Exports Up, Imports Down

Ocean container exports increased again in May, up 3.5%, while container imports—at least those traveling through the ports—declined 9.1%.

According to Cass Information systems, “The ILWU contract dispute, which caused severe disruptions, delays, and more importantly, uncertainties at West Coast ports for more than six months, has cost those ports traffic that has been diverted elsewhere.

Relocations to East Coast and Gulf ports are not the big story, however.” The group noted that a large number of shipments were diverted to foreign ports, especially Canada. As a result, more containers enter cross-border rather than through the ports, thus distorting the import numbers.

A few more specifits: Export container shipments rose for the second time this year, with seven of the top U.S. trading partners increasing their levels of exports. Notably, exports to China, dropped for the second month in a row as the Chinese economy continues to struggle. The 24 percent rise in the strength of the U.S. dollar against other world currencies has played a role in dampening exports in 2015.

The steel industry has taken a particularly hard hit, forcing layoffs at machinery exporters. In fact, the stall in the first quarter of this year and the negative growth in GDP were heavily influenced by export weakness. Since 2009, and through much of the recovery, exports have been a major driver of the U.S. economy; however, the decline in the global economy in the last 18 months put a stop to that.

The import container index decreased 9.1 percent in May, the second drop since the 17.3 percent surge in March. Close to 43 percent of the decline was due to decreased imports from China. Container imports from Vietnam and Indonesia also plunged in May.

Some of the decrease can be attributed not to an actual drop in imported goods, but to a diversion from U.S. West Coast ports to Canadian ports.

Category: Featured, General Update