U.S.-bound retail container imports remain strong, notes Port Tracker report

United States-bound retail container import volumes are expected to approach near-record volumes against the backdrop of retailers striving to meet ongoing strong demand levels and also hedging against potential West Coast port labor disruptions, according to the new edition 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’re in for a busy summer at the ports,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said in a statement. “Back-to-school supplies are already arriving, and holiday merchandise will be right behind them. And the big wild card is what will happen with West Coast labor negotiations with the current contract set to expire on July 1. We continue to encourage the parties to remain at the table until a deal is done, but some of the surge we’ve seen may be a safeguard against any problems that might arise.”

For April, the most recent month for which data is available, import volume—at 2.26 million TEU (Twenty-Foot Equivalent Units)—was down 3.6% compared to March’s 2.34 million TEU, the all-time monthly record, usurping March 2021’s 2.33 million TEU. April’s tally was up 5.1% annually.

For the following months, Port Tracker issued the following projections:

• May, at 2.31 million TEU, down 0.9% annually (May 2021’s 2.33 million TEU is the second-highest volume month on record);
• June, at 2.31 million TEU, up 7.5% annually, but would match June as the third-highest month on record;
• July, at 2.3 million TEU, up 4.8% annually;
• August, at 2.28 million TEU, up 0.2% annually;
• September, at 2.13 million TEU, down 0.4% annually; and
• October, at 2.13 million TEU, down 3.8% annually

Port Tracker pegged the first six months of 2022 to come in at 13.5 million TEU, up from a previous estimate of 13.1 million TEU, which would represent a 5.3% annual gain.

In a recent interview with LM, NRF’s Gold explained that consumer demand remains high and continues to drive solid import volumes.

“Throughout the pandemic, we have seen a $1 trillion swing, in consumer spending, from services to goods,” he said. “The consumer is still out there purchasing online or in store as things open up again and will continue to do more and more of that. I think consumers are looking to spend more on services now that all of the mask mandates are gone and things are opening back up. But inflation and gas prices are a factor, too.”

As for Port Tracker data in the coming months, he said that gains are expected but not to the same extent in 2021, which often saw double-digit increases, related to more moderate annual comparisons.

Hackett Associates Founder Ben Hackett wrote in the report that import growth is expected to be strong, in the coming months, driven by the government of China starting to lift its months-long Covid Zero-based shutdown.

“The anticipation is that the manufacturing and transportation sectors will quickly get back to normal with significant support from the government in its attempt to repair the damage caused to the economy by its Covid Zero policy,” he wrote.

What’s more, with first quarter U.S. GDP down to 1.5% in the first quarter, its first decline since the second quarter of 2020, Hackett cited economists indicating 2022 GDP is expected to increase at less than half of 2021’s 5.7%, adding that 2023 could see more of a decrease. And he added that this has yet to be reflected in trade volumes, due to consumers leveraging higher wages, increases employment, and savings accumulated over the course of the pandemic, with total 2022 import volumes expected to be up 2.6% annually.

“Much of the growth will be in the first half of the year, which is expected to be up nearly 5% [annually],” he said. “Importers continue to re-stock their warehouses in the continuing environment of delays caused by labor shortages in the supply chain.”

And even with the import growth rate expected to decline over the second half of 2022, as the economy responds to anti-inflation policy measures taken by the Federal Reserve, Hackett observed that continued shipping capacity constraints are expected to remain intact, as well as freight rates likely recovering off of recent declines.

“2022 will be another bumper year for carriers, terminals, and ports as the uptick in volumes from China is felt,” wrote Hackett.