Port Tracker report notes August imports will hit a peak amid various labor issues

Labor issues remain front and center, when it comes to assessing the state of United States-bound container imports. That was the main thesis of the Port Tracker report, which was issued today by the National Retail Federation (NRF) and maritime consultancy Hackett Associates.

The ports surveyed in the report include: Los Angeles/Long Beach; Oakland; Tacoma; Seattle; Houston; New York/New Jersey; Hampton Roads; Charleston, and Savannah; Miami; Jacksonville; and Fort Lauderdale, Fla.-based Port Everglades.

Authors of the report explained that cargo import numbers do not correlate directly with retail sales or employment because they count only the number of cargo containers brought into the country, not the value of the merchandise inside them, adding that the amount of merchandise imported provides a rough barometer of retailers’ expectations.

“We were relieved that labor and management at West Coast ports reached a tentative agreement last month but that doesn’t mean supply chain disruptions are over,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said in a statement. “The port strike affecting Vancouver and Prince Rupert shouldn’t have a major impact here but could affect some U.S. retailers whose merchandise comes in through Canada and could have a potential ripple effect at other ports. Meanwhile, the ability to move goods from U.S. ports to stores could be impacted if UPS and the Teamsters don’t resolve their differences before their contract expires at the end of the month. We urge all parties in both negotiations to get back to the table and continue efforts to reach a final deal without engaging in disruptive activity. Seamless supply chains are critical for retailers as we head into the peak shipping season for the winter holidays.”

For May, the most recent month for which data is available, Port Tracker reported that import volumes, for the ports covered in the report, came in at 1.93 million TEU (Twenty-Foot Equivalent Units), marking an 8.5% gain over April and a 19.3% annual decline.

Port Tracker issued projections for June and the subsequent months, including:

• June, at 1.86 million TEU, for an 17.5% annual decrease, which would bring the first half of 2023 to 10.6 million TEU, for a 22% annual decrease;
• July at 1.94 million TEU, for an 11% annual decrease
• August at 2.03 million TEU, for an 10.1% annual decrease, which would be the first month to top 2 million TEU since September 2022;
• September, at 1.96 million TEU, for a 3.4% annual decrease;
• October, at 1.97 million TEU, for a 1.8% annual decrease; and
• November, at 1.88 million TEU, for a 5.9% annual decrease, which would mark the first annual increase since June 2022

While a full-year forecast has not been issued, Port Tracker said that the third quarter is pegged at 5.9 million TEU, for an 8.3% annual decline, with the first nine months of the year estimated to come in at 16.5 million TEU, for a 17.6% annual decrease. Total 2022 imports—at 25.5 million TEU—were down 1.2% annually compared to 2021’s all-time record of 25.8 million TEU. These tallies came with the caveat that Canada’s Vancouver and Prince Rupert aren’t included in those totals and not all of their cargo comes to the United States, but the two ports handled over 185,000 TEU in May, accounting for approximately 9% of combined U.S.-Canadian container imports at ports covered by the full Global Port Tracker report.

Hackett Associates Founder Ben Hackett wrote in the report that second quarter GDP, at 2%, is still significant, even though it is down from the fourth quarter’s 2.6% reading.

“Meanwhile, the latest data from the Census bureau indicates that consumers continue to spend and retailers and wholesalers continue to work down their inventories,” he observed. “And retail sales data suggests that consumer demand remains stable despite the rise in interest rates. These numbers together point toward another quarter of economic growth, which would confirm that the prospect of a recession is looking less likely.”