Import cargo volume at the US’s major container ports is expected to drop to its lowest level in nearly three years during February, according to a new forecast by the National Retail Federation (NRF).
The trade group for the nation’s retailers has lowered its forecast for imports in its monthly Global Port Tracker, on the back of already lowered expectations following the surge levels of a year ago.
Reporting on retailers’ expectations and container volumes along the East and West coasts as well as in the Gulf of Mexico, the NRF has delayed expectations of a possible rebound.
The projection is now for a total of 8.9 million TEUs during the first five months of the year versus last month’s forecast of imports totalling 9.23m TEUs, or a further decline of 3.6% versus last month’s forecast.
The NRF’s forecast of 8.9m TEUs is down 21% from the record import volumes for the first five months of 2022. It lowered the projections for January by 6.8% and February by a further 3.7%.
The Global Port Tracker shows that since the beginning of the pandemic, only the 1.51m TEUs recorded in February 2020 and 1.37m in March 2020 have been lower than the projected 1.57m for February 2023.
“February is traditionally a slow month, but these are the lowest numbers we’ve seen in almost three years. Retailers are being cautious as they wait to see how the economy responds to efforts to bring inflation under control,” said Jonathan Gold, NRF vice president for supply chain and customs policy.
“With the US economy slowing and consumers worried by rising interest rates and still-high inflation, retailers are importing less merchandise.”
Executives in all sectors of the shipping industry, ranging from the major carriers to ports, have all cited retail inventories and shipments as the key factor that will drive container volumes in 2023.
Ocean Network Express representative, Jeremy Nixon, said retail stock was at a high level, contributing to the decline in results during the fourth quarter of 2022. He said recovery depended on when retailers began moving new inventory from Asia. Many forecasts have indicated that a recovery in volumes might not come till mid-2023 or later.
“In some ways, 2023 is reminiscent of 2020, when the world’s economies shut down because of the pandemic and no one had a clue where we were headed,” Ben Hackett, founder of Hackett Associates said.
“Cargo volumes are down, and the economy is in a contradiction of rising employment and wages that promise prosperity, at the same time as high inflation and rising interest rates threaten a recession. The economy is far from shut down, but the degree of uncertainty is very similar.”
US ports covered by Global Port Tracker handled 1.73m TEUs in December, down 2.6% from November and down 17.1% from December 2021. The 2022 annual total was 25.5m TEUs, down 1.2% from the annual record of 25.8m set in 2021. Import volumes levelled off in July and August 2022, while the year-over-year declines in volumes began in September and built in size through the remainder of 2022.
The NRF is forecasting that monthly import volumes will remain below the comparable year-ago levels for at least the first six months of 2023.
