Global News US imports from Asia fell near pre-COVID levels in 2023, but uncertain ‘24 awaits

US imports from Asia last year dropped just over 13% from 2022 to fall largely in line with 2019 levels, putting an end to the overheated pandemic market and suggesting that volumes going forward should be more aligned with pre-COVID 2018-19.

And while US ports should be able to handle the expected modest growth in Asian imports in 2024, those expectations could get tossed aside if prolonged drought conditions at the Panama Canal and shipping disruptions in the Red Sea force retailers to shift a sizeable volume of discretionary cargo from all-water services to the East and Gulf coasts to more reliable trans-Pacific routings calling West Coast ports.

Imports from Asia in 2023 totaled 16.2 million TEUs, down from 18.7 million TEUs in 2022 and 18.8 million TEUs in 2021, but more in line with the pre-pandemic volumes of 15.9 million TEUs in 2019 and 16.4 million TEUs in 2018, according to PIERS, a sister product of the Journal of Commerce within S&P Global.

US ports and their transportation-related supply chains were overwhelmed by the pandemic-linked spike in Asian imports in 2021 and 2022. Vessel backlogs, congested marine terminals, warehouses filled to capacity, chassis shortages and severe congestion at inland rail hubs such as Chicago, Memphis and Dallas crippled port-related supply chains for those two years. West Coast challenges As import volumes returned to pre-pandemic levels last year, US ports cleared out their vessel backlogs, warehouses de-stocked and chassis shortages dissipated. Now, with a likely return of discretionary cargo to the West Coast due to drought-linked transit restrictions at the Panama Canal and continued attacks on vessels in and around the Red Sea causing diversions away from the Suez Canal, the ports of Los Angeles and Long Beach could face congestion issues as the 2024 peak shipping season approaches, according to transportation analyst Larry Gross.

Gross bases his analysis on the possibility that the Los Angeles-Long Beach share of US imports, which stands now at 32%, could jump to 35% by May and climb another two percentage points through the peak season if conditions do not improve at the Panama and Suez canals and a surge of discretionary cargo returns to the Southern California port complex.

Another factor lurking: new contract negotiations between the International Longshoremen’s Association and waterfront employers along the East and Gulf coasts. Any sign that a deal can’t be reached before the current contract’s expiration on Sept. 30 could send discretionary cargo to the West Coast as shippers seek to avoid any labor-related disruptions.

“This ‘back of the envelope’ analysis indicates a good likelihood of stress in Southern California,” Gross writes. “Importers might be well advised to think beyond the obvious and look at secondary routings such as via the Pacific Northwest and Western Canada. These ports are down from previous levels and might have more ability to absorb new volume.”

Port and terminal managers in Los Angeles-Long Beach say their under-utilized facilities are ready to handle any spike in import volumes that may occur. Gene Seroka, executive director of the Port of Los Angeles, told a press briefing last month that the largest US port was operating at 70% utilization, down from the 90%-plus utilization in 2021-22.

Also, West Coast ports have yet to see sustained growth in market share. The West Coast share of US imports from Asia in December was 54.3%, down from 58.1% in November, according to PIERS.