Tandem themes of economic improvement and record-breaking United States-bound imports were apparent, according to the most recent edition of the Port Tracker report, which was released 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.
The report explained that U.S.-bound imports in April, the most recent month for which final import numbers are available, reached their highest level on record, with May potentially on course to hit a new all-time record, driven by the COVID-19 vaccine enabling consumers to get back to pre-pandemic shopping patterns.
“Vaccine rates are increasing, shoppers are back in stores and retail supply chains are working overtime,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said in a statement. “There’s no shortage of demand from consumers, but there continue to be shortages of labor, equipment and shipping capacity to meet that demand. Supply chain disruptions, port congestion and rising shipping costs could continue to be challenges through the end of the year.”
For April, the most recent month for which data is available, import volume came in at 2.15 million TEU (Twenty-Foot Equivalent Units), marking a 33.4% annual gain, for its best April reading ever, compared to April 2020, when the majority of stores were closed, due to the pandemic. This came on the heels of March’s 2.27 million TEU, the record-high for any month, going back to when NRF first started tracking imports.
Looking at the coming months, Port Tracker issued the following projections:
Port Tracker said that the first half of 2021 is currently forecasted to come in at 12.8 million TEU, which would mark a 35.3% annual improvement. The report’s authors noted that this estimate comes with the caveat that annual comparisons are “skewed,” due to the decline in import volumes over the first half of 2020. Should this forecast come to fruition, the report noted that it would place 2021 on track to top the 22 million TEU tally, for all of 2020. Even with the impact of the pandemic, 2020 topped 2019 by 1.9%. And for all of 2021, the report expects total imports to come in at almost 29 million TEU, for a 14.5% annual increase.
“The growth is being driven by an historic low inventory-to-sales ratio after importers depleted their stocks due to the unexpected strong rise in demand,” wrote Hackett Associates Founder Ben Hackett in the report. “This holds for both the retail and industrial sectors. Supply chains are finding it difficult to keep up with demand as shipping capacity struggles. A number of vessels taken out of service when volumes were low remain in drydock while others are delayed in congested ports, which face a lack of manpower both because of COVID-19 illnesses and the tight labor market. Many people remain hesitant about returning to work, affecting ports, rail, trucking and distribution centers.”
And Hackett added that he expects port capacity pressure to remain intact through the third quarter of this year, which will impact inventory and domestic production capacity, and also lead to an increase in inflation beyond the Federal Reserve’s 2% target level.