Trade Currents Quarterly Update: Exploring the Dynamic Landscape of U.S. Container Exports in 2023

Container exports have been relatively steady in 2023 compared to steep declines in imports. In the first six months of 2023, laden import container volumes handled at the 10 largest U.S. ports were 22% below the level from the same period in 2022, based on AAPA data. However, export volumes in the first half of 2023 were almost flat, with 2022 levels edging down 0.2%. While exports in 2023 are faring better than in the past few years, they remain well below their average levels in the 10 years prior to the COVID-19 pandemic. Measured in metric tons, containerized export volumes declined by 6.6% in the first half of 2023 compared to 2022.

Source: AAPA, Port websites, Trade Currents

For all U.S. ports combined, containerized exports also fared better than imports so far this year. In the first seven months, exports measured in metric tons fell 7% year-over year, while imports fell 16%. However, in the longer-term prospects for growth in exports appear to be more problematic.   

U.S. containerized exports peaked at 132 million tons in 2018. Since then, they have been declining each year. By 2022, they dropped to 112 million tons. For exports there was no boost related to the COVID-19 stimulus. In the first seven months of 2023, exports measured in metric tons contracted another 7% year-over-year. Assuming the same year on year performance for the remaining months of this year, 2023 exports will fall to 104 million tons.

In contrast, imports experienced strong growth during the pandemic bolstered by stimulus funding and peaked last year. While the export decline (in metric tons) this year continues the negative trend, the import decline should be considered to be a correction following the 2021 peak. 

However, not all containerized exports declined. The table below shows the performance of the top and bottom export commodities ranked by growth through July of 2023 compared to the same period in 2022.

Source: U.S. Census Bureau, Trade Currents

Likewise, not all containerized exports to all countries have declined in 2023. The table below shows the top five growth and declining export destinations year to date to July 2023 compared to the same period in 2022. Middle East economies have been among the fastest growing in 2023, while European economic growth has been subdued by the central banks’ efforts to subdue inflation by pressing consumers to spend less. Given the anemic growth in U.S. and EU imports, it is not surprising that Asian consumer goods exporter economies have slowed, which may have reduced demand for U.S. exports. Perhaps the most interesting observation is that exports to China increased so far, compared to 2022.

Source: U.S. Census Bureau, Trade Currents

Waste Paper is used to make boxes and other packaging. A drop in exports to China from 7.5 million tons in 2016 to 320 thousand tons in 2022 was the main cause of the fall in overall U.S. exports during this period, accounting for a third of the total decline in exports. This year, a broad-based 1.4-million ton decline in Waste Paper exports affecting almost all major destinations was also responsible for almost a third of the total export contraction.

Plastic Waste is another commodity for which exports have drastically declined in recent years – from a peak of 1.7 million tons in 2016 to 200 thousand tons in 2022. Plastic Waste exports fell another 18% year-over-year in the first seven months of this year.

The seaborne exports of Starch and Sugar Manufacture Residue and Waste have also been trending down. The containerized exports of this commodity increased in the first seven months of this year due only to a shift from bulk to containers, with containerization accounting for 49% of total tonnage in 2023 compared to 41% in the same period of 2022, which may be a result of lower container freight rates and/or improved container availability.

Containerization rates (the share of containerized weight in total seaborne weight) have been a major factor affecting U.S. containerized exports. It is more important for U.S. exports than imports since many exported commodities in the U.S. are of relatively low value and therefore have substantial bulk and break bulk shares. On average, in 2018 to 2022 the value per kilogram of commodities imported in containers was twice as high as the value of exported commodities. Therefore, exports do not have the ability to absorb shipping costs as high as imports can. Changes in the containerization of commodities with substantial bulk and break bulk shares lead to high volatility in the containerized exports of such commodities.

In addition to above mentioned Starch and Sugar Manufacture Residue and Waste, the containerized exports of Cars, Ferrous Scrap and Corn benefited significantly from higher containerization in January-July 2023. In contrast, lower containerization had a substantial negative impact on containerized Wood, Wheat, Sorghum, and Soybean containerized exports.

Are there promising commodities for U.S. containerized exports?  Plastics in Primary Forms is a commodity for which U.S. production benefits from access to relatively inexpensive hydrocarbons. The containerized exports of this commodity surged in 2018 and 2019, but then stalled during the pandemic. However, in the first seven months of this year, this was by far the highest growth containerized export commodity. However, optimism on primary plastic export volumes should be tempered by the fact that about half of the increase in exports have been to China, which is a risky destination for geopolitical reasons and because in the past, containerized exports of Plastics in Primary Forms to China have been volatile.

AAPA has partnered with Trade Currents to improve our collection and reporting of critical port trade data that will not only support the needs of our members, but also benefit the broader trade and logistics industry, research community, and private institutions. The founding partners of Trade Currents include internationally recognized economists and trade analysts Dr. Walter Kemmsies, Andrei Roudoi and Scudder Smith. For questions about this article or AAPA’s work with Trade Currents, contact Shannon McLeod, Vice President of Member Services.