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In the supply chain, a new milestone was reached at the nation’s ports in November: Import cargo volume at the nation’s busiest ports fell below 2 million Twenty Unit Equivalents (TEUs), a measure which describes a 20-foot container or its equivalent.
After clogged supply chains in 2021 gave way to record volumes when bottlenecks eased up last year, import levels have been falling in recent months as more capacity opened up in shipping channels. Container prices plummeted along with it.
To start 2023, import levels are expected to remain at that level for most of the spring, according to the latest Global Port Tracker report from the National Retail Federation and Hackett Associates.
“Ports have been stretched to their limits and beyond but are getting a break as consumer demand moderates amid continued inflation and high interest rates,” said NRF Vice President for Supply Chain and Customs Policy Jonathan Gold, in a statement. “Consumers are still spending and volumes remain high, but we’re not seeing the congestion at the docks and ships waiting to unload that were widespread this time a year ago.”
After falling when the economy shut down in the first weeks of the pandemic, import levels first rose above 2 million TEU in August of 2020. They stayed above that level for more than two years, save for one month.
It’s a sign of pre-pandemic dynamics returning in the systems that are responsible for transporting goods.
“After nearly three years of COVID-19’s impact on global trade and consumer demand, import patterns appear to be returning to what was normal prior to 2020,” Hackett Associates Founder Ben Hackett said. “Nonetheless, as inflation eases and consumer spending returns, we project that growth will slowly return going into the second half of the year.”
The latest data from the Global Port Tracker is as follows:
- In November, ports handled 1.78 million TEU, down 11.3% from October and 15.8% from November 2021. The last month to fall below 2 million was February 2021.
- In December, the projected total is 1.88 million TEU. Final numbers have not yet been reported.
- 2022 as a whole is expected to fall just shy of 2021’s record of 25.8 million TEU, with 25.7 million TEU.
- Looking ahead, the Global Port Tracker forecasts that volumes will hit a low in February 2022 before import levels rise back to 2 million in May.
Will West Coast ports regain their lead?
Looming over supply chain discussions for 2023 is a big question: Will activity at West Coast ports pick back up?
The queue of ships off the coast of Los Angeles was the prime example of supply chain congestion, and it was finally cleared in November 2021. However, many logistics managers diverted ships to other U.S. ports on the East Coast as they sought to avoid the wait. At the same time, labor negotiations between a key longshoreman’s union and managers at the California ports remain unsettled.
It all resulted in the Port of New York and New Jersey overtaking the Los Angeles and Long Beach ports as the top traffic-getter for the last three months, including during peak holiday shipping season in the fall.
A recent CNBC survey of 341 managers laid out the current uncertainty among supply chain managers:
Nearly a third of logistics managers at major companies and trade groups say they do not know how much trade they would return to the West Coast once an International Longshore and Warehouse Union, or ILWU, labor deal is reached, according to CNBC’s supply chain survey.
Eighteen percent of respondents said they would bring back 10% of their diverted trade, another 12% surveyed said they would bring back 20% of the trade they moved away, and another 12% were more bullish, saying they would bring back 60% of their diverted trade.
…Of those surveyed, 49% said they did not divert trade, compared to 40% who said they did.
This remains one dynamic of shipping that is not yet back to normal. As congestion eases up, the finalizing of a labor deal would likely provide a boost. On the other hand, an expanded Panama Canal and more embrace of nearshoring could create conditions for this eastward shift to be one of the lasting changes of the pandemic period of supply chain chaos.
Even with conditions eased up, managers should continue to monitor developments in the supply chain closely for potential savings, and efficiency.
Trending in Operations
On the Move has hiring news from Walmart US, Etsy, commercetools and more.
This week, retailers are bringing on C-level talent in areas such as people, operations and transformation. Plus, Kohl’s appoints an activist investor’s choice for CEO, Fanatics taps a former Snap executive for livestream shopping and Etsy brings aboard Facebook’s former general counsel.
Tom Kingsbury was appointed CEO of Kohl’s. Kingsbury was named interim CEO in December upon the resignation of now-Levi’s President Michelle Gass. Now, Kingsbury will have the job on a permanent basis. Kingsbury served as CEO of Burlington Stores from 2008-2019. Kingsbury was nominated by activist investor Macellum Advisors, which was pushing for change at Kohl’s. With Kingsbury’s appointment as CEO, Macellum has agreed to a “multi-year standstill.”
Judy Werthauser was appointed chief people officer at Walmart U.S. Werthauser comes to the teen-focused retailer from Five Below, where she served as EVP and chief experience officer. Over her four-year tenure, the chain grew from about 750 stores to more than 1,300 locations. Werthauser also served on the board of BJ's Wholesale Club, and is now resigning from that position. “I am excited to work alongside the world-class Walmart U.S. team as they bring the purpose of building a better world – helping people live better and renewing the planet while building thriving, resilient communities – to life,” Werthauser wrote in a LinkedIn post.
Mike Brewer was named chief operating officer at Crate & Barrel Holdings, overseeing operations at Crate & Barrel, CB2, Crate & Kids and Hudson Grace. Brewer brings 20 years of experience from Nike, where he served in roles including sourcing, manufacturing and supply chain. Crate & Barrel said Brewer’s appointment was part of the home retailer’s “ongoing efforts to evaluate and alter its structure in ways that help support overall growth.”
Keith Melker. (Courtesy photo)
Keith Melker was appointed chief strategy and transformation officer at JCPenney. Melker comes to the department store retailer from Wehner Multifamily, where he served as CEO. He was also a previous chief strategy officer at the Kimberly-Clark Corporation. Melker will oversee the transformation office, which includes ownership of metrics such as profitable traffic, inventory management, digital growth and strategic partnerships. With this move, Katie Mullen will remain chief strategy officer.
Blaine Trainor is joining ecommerce software provider commercetools as VP of global partnerships and alliances. In the role, Trainor will lead the headless commerce company’s partnerships ecosystem, working with companies including Deloitte, CapGemini, AWS and Google Cloud. Trainor previously served in senior leadership roles at SAP over a 12-year tenure, and also held sales roles at hybris software and Sterling Commerce.
Nick Bell, a former Google and Snap executive, will lead a new livestream shopping division of Fanatics, Footwear News reported. Bell previously led the teams behind Google Search Experience, and served as VP and global head of content and partnerships at Snap Inc. Bell will lead the Fanatics Live division, which will launch a standalone app that is geared toward collectibles.
NIck Bell. (Photo via LinkedIn)
Colin Stretch was appointed chief legal officer at corporate secretary at Etsy, effective Feb. 14. Stretch previously served as general counsel at Facebook from 2013-2019. He then spent two years as leader in residence at Columbia University Law School's Reuben Mark Initiative for Organizational Character & Leadership, and went on to the law firm Latham & Watkins.
"Colin's extensive experience will be critical to Etsy's efforts to ensure we remain a safe and trusted marketplace, broaden our reach across all our brands, and advocate for microbusinesses around the world,” said CEO Josh Silvermann, in a statement.