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US imports start 2023 with a slowdown
But growth is expected to pick up slightly, according to NRF's Global Port Tracker.
The long winter continues at U.S. ports.
Import levels for February were projected at their lowest volume since the beginning of the pandemic, according to the Global Port Tracker from the National Retail Federation and Hackett Associates. Projections show that imports were down 13.6% from December, and a whopping 26.2% from the year before. The forecast comes for a month which is already the slowest of the year due to Lunar New Year celebrations and the post-holiday lull in retail.
It adds to mounting evidence that retailers are ordering fewer goods as they continue to work through last year’s inventory glut, and face down a pullback on consumer discretionary spending amid inflation. January saw final numbers of 1.81 million Twenty-Foot Equivalent Units (TEU). That was down 16.5% year-over-year. Still, there were signs of some rebound, as the January levels were up 4.4%, bringing the first increase on a monthly basis since August.
“Retailers are maintaining reduced inventories in anticipation of rebuilding with new seasonal stock once they have a clearer take on expected levels of consumer spending,” said Hackett Associates Founder Ben Hackett, in a statement. “While import volumes remain low, the tight labor market and strong wages are helping consumers absorb the impact of inflation and continue to spend.”
Monthly imports (NRF/Hackett Associates Global Port Tracker)
Nevertheless, a bounceback is anticipated later this year, even as import volumes continue to trail 2022 levels.
“There are many uncertainties about the economy, but we expect imports to show modest gains over the next several months,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. “Growth is a positive sign, but levels are still far below normal and retailers will remain cautious as they work to keep inventories in line with consumer demand.”
The Global Port Tracker’s projections include:
- March: 1.74 million TEU, down 25.9% year over year
- April: 1.87 million TEU, down 17.2%
- May: 1.92 million TEU, down 19.7%.
- June: 2 million TEU, which would mark the first time back to that level since October.
Lower import volumes are among the drivers of a big decrease in a key cost of shipping for retailers. The average price of a 40-foot container on March 9 was $1806. That’s 80% below the price on the same week in 2022 and 83% below the September 2021 peak, according to the Drewry World Container Index.
It appears the balance of power in the market has shifted from carriers to retailers. With a slowdown in volumes and prices low, there may be savings in the supply chain for brands and retailers seeking to stock up.