The coronavirus outbreak is expected to have a longer and larger impact on imports at major U.S. retail container ports than previously believed, according to a new report.
Factory shutdowns and travel restrictions in China continue to affect production, per the Global Port Tracker report released Monday by the National Retail Federation (NRF) and consultancy Hackett Associates, and that spells trouble over the imports horizon.
“There are still a lot of unknowns to fully determine the impact of the coronavirus on the supply chain,” Jonathan Gold, vice president for supply chain and customs policy at NRF, said. “As factories in China continue to come back online, products are now flowing again. But there are still issues affecting cargo movement, including the availability of truck drivers to move cargo to Chinese ports. Retailers are working with both their suppliers and transportation providers to find paths forward to minimize disruption.”
This month’s Global Port Tracker report comes as a separate NRF survey of members found 40 percent of respondents said they are seeing disruptions to their supply chains from the COVID-19 outbreak. Another 26 percent expect to see disruptions as the situation continues.
“Now that we are in the coronavirus environment, uncertainty has expanded exponentially,” Hackett Associates founder Ben Hackett said. “Our projections are based on the optimistic view that by the end of March or early April some sort of normalcy will have returned to trade.”
U.S. ports covered by Global Port Tracker handled 1.82 million 20-foot Equivalent Units (TEU) in January. That was up 5.7 percent from December, but down 3.8 percent from unusually high numbers a year ago related to U.S. tariffs on goods from China. A TEU is one 20-foot-long cargo container or its equivalent.
February shipments were estimated at 1.42 million TEU, slightly above the 1.41 million TEU expected a month ago, but down 12.6 percent from last year and significantly lower than the 1.54 million TEU forecast before the coronavirus began to have an effect on imports, the report said. The forecast for March is for container shipments arriving at U.S. ports to be down 18.3 percent from last year to 1.32 million TEU, which would also be below the 1.46 million TEU expected last month or the 1.7 million TEU forecast before the virus.
Shipments for April, which had not previously been expected to be affected, are now forecast at 1.68 million TEU, down 3.5 percent from last year and lower than the 1.82 million TEU forecast last month.
Global Port Tracker said that while the coronavirus makes forecasting difficult, its calls for imports to jump to 2.02 million TEU in May, a 9.3 percent increase year-over-year, on the assumption that Chinese factories will have resumed most production by then and will be trying to make up for lower volume earlier. June shipments are forecast to rise 9.6 percent to 1.97 million TEU and July’s are predicted to increase 3.3 percent year over year to 2.03 million TEU.
Imports during 2019 totaled 21.6 million TEU, a 0.8 percent decrease from 2018 amid the ongoing trade war, but still the second-highest year on record. The first half of 2020 is forecast to reach 10.23 million TEU, down 2.8 percent from the same period last year and below the 10.47 million TEU forecast a month ago.
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.