- 13.1% November increase for inbound boxes as volume is still strong
- 7.2% increase with outbound containers as export decreases reverse
- Big coastal shifting due to ILA labor disruption concerns continuing.
The ten largest US ports showed a 13.1% year over year gain in inbound volume in November. That was well above October's 9.7% gain and slightly above the 12.2% increase in September. The November growth marks fourteen straight months of increases in inbound volume. Outbound volume has turned positive following two straight months of declines that were extending on a downward trend evident in the last several months. For the eleven month year to date period, inbound loads are up 15.2% or more than three times the 4.7% growth in outbound loads over that same period.
The charts and tables in these monthly reports mostly speak for themselves and one way to efficiently digest the latest information is to flip through them. Most of the charts and tables are the same but are updated for the latest month's data. Each month we will include a new table just before the pricing update that presents another look at actual data. This month that table looks at latest month's growth by port from several different angles.
The roller coaster ride we've experienced in inbound volume to the US is clearly evident in the chart below showing monthly changes since 2017.
The total value of goods in containers moving in and out of all US ports including the two dozen outside of the Top 10 in November was $185.3 billion. Growth as well as any constraints in those movements will have pronounced positive and negative effects across the economy. Container volume growth rates and trends provide timely macro economic data that is an early pulse on underlying activity. Based on that metric on the movement of tangible goods, the US economy in 2024 looks vibrant and continues to outperform the rest of the world. Regular readers of my reports would have obtained some early insight on various economic measures as inbound goods movements come before later activity. While some articles have dismissed container volume strength as just front loading, that seems more anecdotal with no data supporting it. The chart below highlights the strong US performance through the monthly year over year changes in US container volume increases compared to worldwide data. Worldwide data is just
through October as that is the latest month available from CTS.
September's global pricing index is now out and it showed a pronounced decrease. However, it is still well above where it began at in 2024 and marginally above its actual average for the first 10 months of 2024. We will highlight pricing levels and trends in a later section. As noted in recent reports, the strength in sector pricing that has been evident throughout 2024 can be directly linked to the Red Sea situation that has had the effect of cutting worldwide container shipping capacity by 8% augmented by stronger volume levels. Inbound loads this November compared to November 2019 were 27.1% higher which is equivalent to a five-year CAGR of 4.9%, well above the 3.8% five-year CAGR for October and continuing the recent uptrend of that key metric. These medium term comparisons to the same month in 2019 have the effect of netting out the impact of the pandemic. The latest five- year growth rate is also well above the 3.8% ten-year CAGR that total inbound loads grew from 2010 to 2020. My own long-term growth rate estimate for container volume is 2.7% per year. While well below long periods where container volume in most trade lanes was growing at multiples two and three times or more compared to GDP growth rates, my anticipation is that it will still grow slightly above future GDP growth rates.
Container shipping growth will outpace other shipping segments and one reason for that is the scale economies of the large container ships of today will continue to result in some transition of cargoes in those segments to container shipping. An under appreciated advantage of container shipping is the higher overall capacity utilization that it achieves compared to other segments. At a 2.7% growth rate, volume will double every 26 years, a fact that container port planners should keep top of mind.
November's overall inbound volume of 2,033,620 TEU was sequentially 5.1% below October. A more relevant comparison of sequential changes by port is included in the new table just before the pricing update. November was 11.1% below the record inbound volume month set in May 2022. Despite articles and various anecdotal comments, the official Census data shows that any impact from pulling forward volume, whether out of concern related to possible East/Gulf Coast labor unrest or potential increased tariffs covered at the end of this report, has been minimal. While there has not been a noticeable increase in inventories or the related inventory to sales ratio, the former has clearly impacted coastal shifting in November.
According to just released figures from the Census Bureau, total US business inventories at the end of October were $2,587.0 billion, up $2.7
billion or 0.1% from the revised September measure of $2,584.3 billion. The September figure was revised up $0.6 billion from the $2,583.7 billion initially reported. The Census Bureau inventory figures are seasonally adjusted and the modest $2.7 billion increase hardly indicates a meaningful buildup of inventory from pulling forward imports of goods in containers. My estimate is the total value of goods in inbound containers to all US ports in October was $128.3 billion. Even if all of the $2.7 billion inventories increase related to such front loading, it represented only 2.1% of inbound loads. The inbound volume increase in October was over four times that measure at 9.7%. Another indication that underlying economic conditions drives the recent volume gains is the total business inventories/sales ratio
was 1.37 at the end of October, the same as September, August and July. That measure was marginally higher than compared to last October when it
was 1.36.
The 52 months after the beginning of the pandemic effect began in August 2020 was a period that first included volume gains from increased consumer spending, the decreases from the rebound of that and more recently the underlying volume strength. November's overall inbound volume was 3.3% above that 52-month average. East/Gulf Coast ports were 3.4% below their 52-month average while West Coast ports were 10.1% above their average in one of the clear signs of coastal shifting. Just as we saw some shippers avoiding the West Coast in favor of the East/Gulf Coast when the ILWU contract was up for renewal in mid-2023, we can now see the reverse happening more in the November statistics. The ILA situation will continue to effect what coast the containers land on for the balance of the year. That
situation is far from settled as discussed at the end of this report.
The West Coast has outperformed the East/Gulf Coast ports in fourteen of the last sixteen months, with only May and March being the exceptions. Those two months were a return to the period before the last sixteen months that saw a streak of 26 straight months where the East/Gulf Coast ports out-
performed West Coast ports.
The three-day ILA strike at the beginning of October that ended with a temporary three month extension has continued the coastal switching from east to west that was already occurring with many shippers. With the uncertainty of the East/Gulf Coast labor situation, some shippers are choosing for loads destined for eastern points to be rerouted over the West Coast with follow on intermodal movements that are more costly but that provide more certainty. November showed a 14.2 percentage point coastal gap based on a 20.2% increase at West Coast ports compared to the 6.0% increase at East/Gulf Coast ports. That was a sharp narrowing from the October coastal gap of 29.2 percentage points.
