Implications of COVID-19 on the US container port distribution system: import cargo routing by Walmart and Nike

ABSTRACT

The purpose of this paper is to discuss the implications of COVID-19 on container import flows via the US port distribution system. We employ statistics collected for more than 21 US ports and for more than 550,000 container shipments by Walmart and Nike to identify trends and potential shifts in the US port distribution system. Results unveil different changes in distribution channels during the pandemic era, between aggregated port level and industry level. These differences are specific to firms and could be explained by the origin of flows, carrier selection to transport cargos and US port/inland distribution systems. Our study contributes to a better understanding of the different role played by ports for industries (retailers, footwear and apparel) and shows that the ability to adapt supply chains to a major disruption remains subject to the initial choices on the location of production, on carrier choices and on port/inland distribution networks.

KEYWORDS:

• COVID-19
• port system
• inland distribution
• sourcing
• disruption
• retailer

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability statement

The data that support the findings of this study are available from the corresponding author, upon reasonable request.

Notes

1 International import cargoes moving into the US via air, rail or truck are not included. The container import data used in this research are restricted to Walmart and Nike as shippers or beneficial owners of containerised cargo that entered US ports by ocean vessels. Statistics do not include containers shipped using a bill of lading for non-vessel-operating common carriers, forwarders or brokers, and third-party logistics providers.

2 Most US containers are 40-feet containers or FEU, so one container equals two TEU (Holmes and Singer 2017).

3 In March 2021, Walmart announced that it will be investing $350 billion over the next decade on products made, grown or assembled in the US in six priority categories, including plastics, textiles, small electrical appliances, food processing, pharmaceutical and medical supplies. The most competitive products for reshoring are those made of raw materials available in the US, such as cotton, plastics and metals, items with highly automated product processes, and products that are inefficient to ship. This local sourcing strategy could cut imports by 20% over the next decade (Edelson 2021).

4 For example, the MSC Isabella with a nominal capacity of some 23,000 TEU broke earlier records when the Pier 400 terminal moved 34,263 TEU on her in the port of Los Angeles in June 2020.

5 The Liner Shipping Connectivity Index (LSCI) by UNCTAD is based on five components of the maritime transport sector: number of ships, their container-carrying capacity, maximum vessel size, number of services, and number of companies that deploy container ships in a country’s ports (with index 100 equal to the highest value of all countries in 2006) (UNCTAD 2021).