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NRF's Global Port Tracker sees a slowdown in the supply chain in 2023 as retailers exercise caution.
Import volumes are expected to fall near levels not seen since the pandemic-induced economic slowdown of 2020 this winter, according to a new forecast.
February is forecast to be the slowest month for retail imports since May 2020, when factories in Asia shut down and stores closed to protect health and safety, according to the Global Port Tracker from the National Retail Federation and Hackett Associates. Only February and March 2020 saw lower numbers.
Now, retailers are importing less merchandise amid the slowing economy, elevated inflation and rising interest rates, said NRF Vice President for Supply Chain and Customs Policy Jonathan Gold.
“February is traditionally a slow month, but these are the lowest numbers we’ve seen in almost three years,” said Gold, in a statement. “Retailers are being cautious as they wait to see how the economy responds to efforts to bring inflation under control.”
NRF/Hackett Associates Global Port Tracker. (Courtesy photo)
The forecast slowdown in February comes after December import volumes of 1.73 million Twenty-Foot Equivalent Units (TEUs) were down 2.6% from November and decreased 17.1% from December 2021. January numbers have yet to be reported, but are expected to fall 17.6% year-over-year.
The slowdown is expected to continue when compared to 2022, here are the forecasts for the next four months:
- March is forecast at 1.76 million TEU, down 24.8% year over year
- April is forecast at 1.87 million TEU, down 17.3%.
- May is forecast at 1.92 million TEU, down 19.9%.
- June is forecast at 2 million TEU, which would be the first reading above 2 million since October, but still down 11.3% from the previous year.
The pullback comes after 2022 saw record import volumes as supply chains unclogged. In turn, this left many retailers with an inventory glut as multiple seasons of merchandise arrived at the same time.
While a correction is evident, experts say this isn’t a return to normal. After two years of shocks, the supply chain is once again in uncharted waters.
“In some ways, 2023 is reminiscent of 2020, when the world’s economies shut down because of the pandemic and no one had a clue where we were headed,” Hackett Associates Founder Ben Hackett said. “Cargo volumes are down, and the economy is in a contradiction of rising employment and wages that promise prosperity at the same time high inflation and rising interest rates threaten a recession. The economy is far from shut down, but the degree of uncertainty is very similar.”