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NRF: Expect ‘Modest Gains’ in Imports This Spring

Import cargo volume at top U.S. ports is set to inch up again in the coming months, as container shipments are still projected to have hit a near three-year nadir in February.

All major national ports covered by the Global Port Tracker handled a combined 1.81 million 20-foot equivalent units (TEUs) in January, down 16.5 percent year over year, but up 4.4 percent from December, marking the first month-over-month increase in container volume since August.

While January is the latest month for which final numbers are available, February’s cargo forecast dropped to 1.56 million TEUs, down 13.6 percent from January and down an “unusually large” 26.2 percent from a year earlier, the report said. The February forecast is slightly lower than the tracker’s previous projections, which called for 1.57 million TEUs.

That would make February 2023 the slowest month since 1.53 million TEUs were processed at top U.S. ports in May 2020, when many factories in Asia and most U.S. stores were closed due to the Covid-19 pandemic. Since the beginning of the pandemic, only the 1.51 million TEUs recorded in February 2020 and 1.37 million TEUs in March 2020 have been lower.

Expect February to remain the trough for at least the next few months into the summer, according to the Global Port Tracker, which is compiled by maritime trade consultancy Hackett Associates for the National Retail Federation (NRF).

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“There are many uncertainties about the economy, but we expect imports to show modest gains over the next several months,” said Jonathan Gold, vice president for supply chain and customs policy, NRF, in a statement. “Growth is a positive sign, but levels are still far below normal and retailers will remain cautious as they work to keep inventories in line with consumer demand.”

Even without the impact of the pandemic, February is historically the slowest month of the year because of Lunar New Year factory shutdowns in Asia and retailers’ lull between the holiday season and spring shopping. In February 2022, the impact of Lunar New Year was mitigated by congestion at U.S. ports that kept a supply of vessels waiting to unload, resulting in an artificially large year-over-year comparison in the month just ended.

“Retailers are maintaining reduced inventories in anticipation of rebuilding with new seasonal stock once they have a clearer take on expected levels of consumer spending,” said Ben Hackett, founder at Hackett Associates. “While import volumes remain low, the tight labor market and strong wages are helping consumers absorb the impact of inflation and continue to spend.”

Beginning in March, imports are expected to climb each month at least through mid-summer, but remain below last year’s levels. March is forecast at 1.74 million TEUs, down a projected 25.9 percent year over year, while April would be down 17.2 percent to 1.87 million TEUs.

Each of the following three months is expected to build on the last, with May coming in at an estimated 1.92 million TEUs processed at the ports, down 19.7 percent from year-ago totals. June is forecast at 2 million TEUs, the first time imports are expected to be that high since October 2022, but down 11.5 percent from last June. Ports are expected to accommodate 2.13 million TEUs worth of shipping containers in July, down 2.5 percent year over year.

The first half of the year is forecast at 10.9 million TEUs, down 19.5 percent from the first half of 2022. This pronounced drop compares with the relatively tiny gap seen in the prior two years—imports for 2022 totaled 25.5 million TEUs, down 1.2 percent from the annual record of 25.8 million TEUs set in 2021.

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

Descartes Systems Group is backing up the stats from the Global Port Tracker, also indicating that February 2023 U.S. container import volumes plummeted on both a monthly and annual basis. Total containers tracked fell 16.2 percent from January 2023 to 1.73 mullion TEUs. Versus February 2022, TEU volume was down 25 percent, but only 0.3 percent lower than pre-pandemic February 2019.

“Examining imports from January and February in the previous six years, February 2023 volumes would have been expected to be significantly lower than January 2023,” said Chris Jones, executive vice president, industry at Descartes. “Declining container import volumes but rising port transit times demonstrate that, while 2023 volumes resemble 2019, global supply chain performance could remain uneven in 2023.”

After an upward move in January, Chinese imports into the U.S. returned to a downward trend in February 2023, according to Descartes. Compared to January 2023, imports from China decreased by 17.1 percent to 632,702 TEUs. Meanwhile, China represented 36.5 percent of the total U.S. container imports, a decline of 0.4 percent from the high of 41.5 percent in February 2022.

Descartes’ data shows that market share held by top West Coast ports and top East and Gulf Coast ports remained relatively stable. The Port of Los Angeles showed the greatest overall container volume decrease, representing 40 percent of the overall decline in TEU quantities among major ports. In total, the Los Angeles gateway saw TEUs drop 32 percent, the biggest dip among the 10 ports studied. The second largest U.S. harborer of containers, The Port of New York and New Jersey, saw a 9 percent decline in TEUs, likely due to the rerouting of goods in that direction as importers remain leery about the ongoing labor negotiations on the West Coast.