US imports to hit lowest level in 2 years

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Imports hit lowest level
Many US retailers imported goods early this year to beat rising inflation and supply chain disruptions. But despite the lower volumes, retailers were still experiencing challenges along the supply chain, including US ports and intermodal rail yards. Photo from LA Port
  • US imports to drop to their lowest level in nearly two years at the end of 2022 as retailers are well stocked for holidays, says the Global Port Tracker report
  • Many retailers imported merchandise early this year to beat rising inflation and supply chain disruptions, says US National Retail Federation official
  • December imports, forecast at 1.96 million TEU, would be the lowest since the 1.87 million TEU in February 2021, the last time that the monthly total fell below 2 million TEU

Imports at the major American container ports are expected to hit their lowest level in nearly two years by the end of 2022 even though retail sales continue to grow, says the monthly Global Port Tracker report released on October 7 by the US National Retail Federation and Hackett Associates.

“The holiday season has already started for some shoppers and, thanks to pre-planning, retailers have plenty of merchandise on hand to meet demand,” said Jonathan Gold, NRF vice president for supply chain and customs policy.

His statement confirmed reports that US retailers had ordered merchandise supplies from manufacturers in Asia well ahead of time to avoid getting their goods snagged in port congestions or other supply chain disruptions during the peak season.

Gold said many retailers imported merchandise early this year to beat rising inflation and supply chain disruptions. He said despite the lower volumes, retailers were still experiencing challenges along the supply chain, including US ports and intermodal rail yards.

“The growth in US import volume has run out of steam, especially for cargo from Asia,” Hackett Associates founder Ben Hackett said.

“Recent cuts in carriers’ shipping capacity reflect falling demand for merchandise from well-stocked retailers even as consumers continue to spend. Meanwhile, factory closures during China’s October Golden Week holiday, along with the Chinese government’s continuing ‘Zero Covid’ policy, have impacted production, reducing demand for shipping capacity from that side of the Pacific as well.”

US ports covered by Global Port Tracker handled 2.26 million twenty-foot equivalent units (TEU) in August. That was up 3.5% from July but down 0.4% from August 2021.

Ports have not yet reported September’s numbers, but Global Port Tracker projected 2.07 million TEU for the month, down 3% year on year. October is forecast at 2 million TEU, down 9.4% y-o-y; November at 2.01 million TEU, down 4.9%, and December at 1.96 million TEU, down 6.1%.

The December number would be the lowest since 1.87 million TEU in February 2021, the last time the monthly total fell below 2 million TEU.

The first half of the year totaled 13.5 million TEU, up 5.5% y-o-y. The remainder of the year will be 12.5 million TEU, down 4% y-o-y. Full-year 2022 is expected to total 26 million TEU, up 0.7% from last year’s annual record of 25.8 million TEU.

Imports should bounce back briefly in January 2023 to 2.06 million TEU, down 4.9% y-o-y. February is forecast at 1.8 million TEU, down 15% y-o-y, as the month returns to its usual slowdown due to Lunar New Year factory shutdowns each year in Asia. Numbers stayed high despite the holiday last year due to backed-up cargo that kept congested ports busy during the month.

The cargo data comes as NRF forecasts that 2022 retail sales will grow between 6% and 8% over 2021. Sales were up 7.5% during the first eight months of the year. – Global Port Tracker