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Cargo Imports Crater as Holiday Season Nears Finish Line

With most holiday merchandise already on retailers’ shelves or in their warehouses, December cargo volume at the nation’s major container ports should be significantly below records set earlier this year, according to the monthly Global Port Tracker report released Wednesday by the National Retail Federation (NRF) and Hackett Associates.

“Retailers are in the middle of the annual holiday frenzy, but ports are headed into their winter lull after one of the busiest and most challenging years we’ve ever seen,” said Jonathan Gold, vice president for supply chain and customs policy for the NRF. “We’ve dodged a rail strike and the retail supply chain should be able to easily handle the remaining weeks of the holiday season. But it’s time to settle on a labor contract for West Coast ports and address other supply chain issues that remain so the lull doesn’t become the calm before a storm.”

President Biden last week signed legislation imposing a labor agreement on freight railroads and unions, averting a potentially catastrophic strike that could have come this week. But members of the International Longshore and Warehouse Union have been working without a contract since their previous agreement with the Pacific Maritime Association expired on July 1. Worries about potential West Coast disruption led many retailers to bring in cargo early this spring and also prompted a shift to East Coast and Gulf Coast ports that have witnessed record volumes as a result.

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Monthly cargo numbers repeatedly broke previous records this spring before hitting a new all-time high of 2.4 million 20-foot containers or equivalent units (TEU) in May. Volume has fallen since and Hackett Associates founder Ben Hackett said current lower imports are the result of retailers balancing inventory built up earlier against slowing consumer demand and expectations for 2023.

“Key indicators point the way to a robust economy,” Hackett said, referring to recent increases in retail sales, employment and gross domestic product, despite high inflation and interest rate hikes by the Federal Reserve. “Yet the volume of imported container cargo at the ports we cover has declined, and the next six months will see further declines to a level not seen for some time.”

U.S. ports covered by Global Port Tracker handled 2 million TEU in October, down 1.3 percent from September and off 9.3 percent from October 2021.

Ports have not yet reported November’s numbers, but Global Port Tracker projected the month at 1.85 million TEU, down 12.3 percent year over year. That would be the lowest since 1.87 million TEU in February 2021. December shipments are forecast at to fall 7.2 percent year over year to 1.94 million TEU. Those numbers would bring 2022 to 25.81 million TEU, down just 0.1 percent from last year’s annual record of 25.84 million TEU.

January container shipments are projected to down 1.97 million TEU from January 2022, while February is forecast at 1.67 million TEU, the lowest since 1.61 million TEU in June 2020 and a 20.9 percent drop from last year, when backed-up cargo kept congested ports busy. Global Port Tracker sees March shipments falling 18.6 percent year over year to 1.91 million TEU and April to decline 13.8 percent to 1.95 million TEU.

Global Port Tracker provides historical data and forecasts for the U.S. ports of Los Angeles-Long Beach and Oakland, Calif., and Seattle and Tacoma, Wash., on the West Coast; New York-New Jersey; Port of Virginia; Charleston, S.C.; Savannah, Ga., and Port Everglades, Miami and Jacksonville, Fla., on the East Coast, and Houston on the Gulf Coast.