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US Import Volume Tumbles to Near 2-Year Low

While “normal” still doesn’t describe the state of U.S. ports, America’s marine gateways have reached a major milestone that signals a significant decline in cargo volume. Monthly imports fell below the 2 million 20-foot equivalent unit (TEU) mark for the first time since February 2021, the only month when ports handled fewer than 2 million TEUs since July 2020.

U.S. ports handled 1.78 million TEUs in November, according to the Global Port Tracker from the National Retail Federation (NRF) and Hackett Associates. That number was down 11.3 percent from October and down 15.8 percent from November 2021. It marked the lowest total since 1.87 million TEUs were handled at the 12 major ports in February 2021.

“Ports have been stretched to their limits and beyond but are getting a break as consumer demand moderates amid continued inflation and high interest rates,” said Jonathan Gold, vice president for supply chain and customs policy at NRF, in a statement. “Consumers are still spending and volumes remain high, but we’re not seeing the congestion at the docks and ships waiting to unload that were widespread this time a year ago. It’s good to escape some of the pressure, but it’s important to use this time to address supply chain challenges that still need to be resolved like finalizing the West Coast port labor contract.”

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Gold’s comments are paramount as concerns regarding the major West Coast ports continue to linger. The threat of a dockworker strike still hangs in the balance, as 22,000 laborers across 29 West Coast port terminals have worked without a union contract since July 1 when the previous agreement expired. While fewer containers may be coming in, businesses hoping for an expedited shipping process aren’t quite out of the woods.

The potential for a strike has resulted in shippers rerouting more cargo to the East Coast, with the Port of New York and New Jersey overtaking the Ports of Los Angeles and Long Beach as the busiest port complex at one point last year.

In December, the N.Y./N.J. ports, which don’t break out individual monthly import and export TEU numbers, revealed that they were the nation’s busiest container port for the fourth consecutive month in November. The ports handled 20 percent more cargo that month than in November 2019. However, the ports did say that November 2022 cargo activity fell by 8.6 percent on a month-over-month basis as the seasonal peak of activity associated with incoming holiday merchandise ended.

Data from supply chain visibility platform Project44 backs up the claims, estimating that in August, the N.Y./N.J. hub brought in 843,000 shipping containers, ahead of Long Beach’s 807,000 TEUs and Los Angeles’ 805,000 TEUs processed.

The state of cargo imports has been a roller coaster since the start of the Covid-19 pandemic. Imports plummeted to a four-year low of 1.37 million TEUs in March 2020 as the virus’ outbreak prompted the temporary shutdown of much of the U.S. economy. But cargo soared after the initial shutdowns ended and pent-up consumer demand was unleashed that summer. By August 2020, total imported TEUs at the ports had skyrocketed to 2.1 million, surpassing the 2 million mark for the first time.

Other than February 2021, the number of imported TEUs at U.S. ports had stayed above 2 million ever since, peaking in May 2022 at 2.4 million TEUs.

“After nearly three years of Covid-19’s impact on global trade and consumer demand, import patterns appear to be returning to what was normal prior to 2020,” Hackett Associates founder Ben Hackett said. “Nonetheless, as inflation eases and consumer spending returns, we project that growth will slowly return going into the second half of the year.”

Ports have not yet reported December numbers, but the Global Port Tracker projected the month at 1.88 million TEUs, down 10.1 percent year over year and up 5.7 percent from November. That would bring 2022, which repeatedly broke monthly records in the first half of the year but saw significant drops in the second half, to an annual total of 25.7 million TEUs, down 0.7 percent from the annual record of 25.8 million TEUs set in 2021.

Despite the slowdown in cargo, NRF said that retail sales are on track to meet of 6 percent to 8 percent growth over 2021 for both the full year and the holiday season. The trade association will release December’s sales numbers next week.

NRF and Hackett Associates are forecasting a calmer 2023 at the ports. January is forecast at 1.91 million TEUs, down 11.5 percent year over year. In February, ports are projected to process 1.63 million TEUs, the lowest since 1.61 million TEUs in June 2020 and a 23 percent drop from last year, when backed-up cargo kept congested ports busy. The year-over-year decline is anticipated to be even steeper in March down 25.5 percent to 1.75 million TEUs. April and May could also see estimated declines of 14.5 percent and 16.2 percent to 1.94 million and 2 million TEUs, respectively.

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