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Retailers: Falling U.S. Container Imports at Odds With Consumer Spending Growth

Despite a rise in consumer spending, U.S. container imports are expected to be 22% lower in the first half of 2023 compared to the same period last year, according to the latest Global Port Tracker report released today by the National Retail Federation (NRF) and Hackett Associates.

The report highlights disruptions occurring at West Coast ports, although these incidents have not yet had a widespread impact on nationwide data.

“Cargo volume is lower than last year but retailers are entering the busiest shipping season of the year bringing in holiday merchandise. The last thing retailers and other shippers need is ongoing disruption at the ports,” said NRF Vice President for Supply Chain and Customs Policy Jonathan Gold.

NRF earlier this week issued a statement calling on the Biden administration to intervene following reports of disruptions at terminals at the Ports of Oakland and Long Beach. The disruptions have come as the International Longshore and Warehouse Union and the Pacific Maritime Association have failed to reach a new labor agreement after more than a year of negotiations.

“If labor and management can’t reach agreement and operate smoothly and efficiently, retailers will have no choice but to continue to take their cargo to East Coast and Gulf Coast gateways,” said Gold. “We continue to urge the administration to step in and help the parties reach an agreement and end the disruptions so operations can return to normal. We’ve had enough unavoidable supply chain issues the past two years. This is not the time for one that can be avoided.”

Ben Hackett, the Founder of Hackett Associates, noted the discrepancy between the decline in container import demand and the continuous growth in consumer demand. “Economists and shipping lines increasingly wonder why the decline in container import demand is so much at odds with continuous growth in consumer demand,” Hackett said.

Despite strong employment numbers and increases in personal income, import container shipments have only reached pre-pandemic levels seen in 2019 and are expected to remain there for the foreseeable future.

In April, U.S. ports covered by Global Port Tracker handled 1.78 million Twenty-Foot Equivalent Units (TEU), representing a 9.6% increase from March but a significant 21.3% decrease year over year. While May numbers are yet to be reported, the Global Port Tracker projects a decline of 23% year over year, amounting to 1.84 million TEU. The forecast for June stands at 1.91 million TEU, down 15.3% from the same period last year. These projections indicate that the first half of 2023 will witness a total of 10.5 million TEU, down 22.3% from the first half of 2022.

Looking ahead, Global Port Tracker forecasts a decline in import volumes for the remaining months of the year. July is expected to reach 1.99 million TEU, down 8.8% year over year, followed by August at 2.02 million TEU, down 10.5%. September and October are projected to have import volumes of 1.95 million TEU each, representing decreases of 4% and 2.7% respectively.

While a full-year forecast has not been provided, the third quarter of 2023 is expected to see a total of 5.97 million TEU, down 7.9% from the same period in the previous year. The first nine months of 2023 are projected to accumulate 16.48 million TEU, marking a decline of 17.6% compared to the same period in 2022. Import volumes for the entirety of 2022 reached 25.5 million TEU, a slight decrease of 1.2% from the record set in 2021, which stood at 25.8 million TEU.