Cargo Data Confirms Second-Half Slowdown Fears

Date: Wednesday, May 10, 2023
Source: Sourcing Journal

After hitting a three-year low in February, import cargo volumes at U.S. ports have increased, according to new data.

The number of containers traveling to U.S. shores is likely to remain well below 2022 levels heading into the fall peak season, according to the Global Port Tracker report released Monday by the National Retail Federation (NRF) and Hackett Associates.

“Consumers are still spending and retail sales are expected to increase this year, but we’re not seeing the explosive demand we saw the past two years,” NRF vice president for Supply Chain and Customs Policy Jonathan Gold said. U.S. ports handled 1.62 million TEUs in March, up 5 percent from February, but down more than 30 percent year over year. “Congestion at the ports has largely gone away as import levels have fallen, but other supply chain challenges remain, ranging from trucker shortages to getting empty containers back to terminals,” he said.

The situation has also been impacted by ongoing labor negotiations at the West Coast ports. Ports of Long Beach and Los Angeles operations were disrupted by a worker walkout during Easter weekend. Both the International Longshore Workers Union (ILWU) and the Pacific Maritime Association (PMA) have since agree on some “key issues” for a new contract, but are otherwise mum on the talks.

“We were pleased by recent reports of progress related to the West Coast port labor negotiations but will continue to monitor the situation closely until there is a new agreement ratified by both parties,” Gold said.

“With economic uncertainty continuing, the impact on trade is clear,” Hackett Associates founder Ben Hackett said. He noted that heightened inflation remains a sticking point, along with Federal Reserve interest rate hikes and recent bank failures. “Year-over-year import volumes have been on the decline at most ports since late last year and declining exports out of China highlight the slowdown in demand for consumer goods,” he said. “Our forecast now projects a larger decline in imports in the first half of this year than we forecast last month.”

While the ports have not yet posted April data, Global Port Tracker predicts that the month will see lower volume from a year ago. U.S. ports are expected to bring in 1.73 million TEU, down 23.4 percent from April 2022. May was forecasted at 1.83 million TEU—23.5 percent less than last year’s 2.4 million TEU, which marked the all-time record for number of containers brought into the U.S. during a single month.

June is likely to continue the trend, with a projection of 1.9 million TEU, down 15.9 from the previous year, and July at 2.01 million TEU, down 7.9 percent. August is projected to handle 2.04 million TEU, a 9.9 percent decline from the 2022 period, and September will see 1.96 million TEU, a reduction of 3.4 percent. Global Port Tracker said the year-over-year drops contrast with last year’s strong import volumes. 2022 volumes totaled 25.5 million TEU, down just 1.2 percent from the annual record of 25.8 million TEU set in 2021. “Our view is that imports will remain below recent levels until inflation rates and inventory surpluses are reduced,” Hackett said.

A revised first-half forecast, previously projected at 10.8 million TEU entering at U.S. ports, now expects 10.4 million TEU for January-through-June 2023—22.8 percent lower than the first half of last year.

Global Port Tracker has not released its projections for the full 2023 year, but third quarter will likely see about 6 million TEU, 7.2 percent less than 2022. The first nine months of 2023 is projected at 16.5 million, down 17.8 percent year over year.


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