Shippers appear to be getting an early start on importing goods this year ahead of winter peak shopping season, according to numbers from supply chain visibility platform provider Project44.
The prime driver of the trend is likely a shelf of new tariffs set to be imposed soon by the Biden Administration on certain goods from China. Initially slated to go into effect on August 1, they have since been delayed, the report said.
Intended to curb “unfair trade practices” long employed by the Asian nation, the extra costs will apply to items such as batteries, electric vehicles, semiconductors, ship to shore cranes, solar cells, and steel and aluminum products, the White House said when it unveiled the plan in May.
In a move to import goods before they have pay those additional fees, U.S. companies have driven up imports from China by 4.5% compared to the same period last year. The numbers apply to “ocean peak season,” the annual period when retailers rush to import freight ahead of the holiday season. Traditionally spanning from August to October, this period has started as early as June in recent years, Project44 said in an August 8 report.
Project44 noted that the rise in Chinese imports runs against the industry's move towards diversifying manufacturing origins away from its historical dependance on China, a shift that gained traction during the COVID-19 lockdowns due to major supply chain disruptions. However, the emergence of the additional tariffs could explain the change, the firm said.
In another change to traditional patterns, the early surge of imports is trending more toward U.S. West Coast ports than East Coast destinations. Specifically, Project44 tracked a jump in volume to the Port of Long Beach, which has increased by 5% from 2023 and now makes up 22% of peak season volume so far in 2024. More broadly, 44% of June and July shipments were delivered to Los Angeles, Long Beach, Tacoma, or Oakland, while ports like New York, Savannah, and Baltimore saw decreases in volume.
One reason for that may be increasing shipper concern about the chances of a dockworkers strike at East Coast and Guld Coast ports. Ahead of the September 30 expiration of the workers’ contract, talks appear to have stalled out between union group the International Longshoremen’s Association and port operator the United States Maritime Alliance, according to retail industry groups such as the National Retail Federation (NRF) and the Retail Industry Leaders Association (RILA).
