Economy
07 April
US import volumes falling back to pre-pandemic norms
In February, ports saw the lowest volume since the height of early pandemic closures.

Photo by David Vives on Unsplash
In February, ports saw the lowest volume since the height of early pandemic closures.
U.S. import levels rose to record volumes during the pandemic, then descended to a winter lull over the last two quarters. Now, they’re returning to a pre-pandemic state of normal.
That’s according to the latest edition of the Global Port Tracker from the National Retail Federation and Hackett Associates.
For February, which is the latest month for which data is available, Twenty-Foot Unit Equivalents, or TEUs, were down 14.4% from the prior month, and 26.8% year-over-year. February is typically the slowest month of the year, as retailers are in a post-holiday lull and Lunar New Year celebrations close factories in China. Yet this month’s volume of 1.55 million TEU was the lowest since May 2020, when the pandemic closed many factories and stores.
The Tracker projects that March will have a similar showing, falling 28.2% year-over-year. These declines are unusually large, but are coming because of the record highs posted in 2022.
Still, they show that import levels are settling back into historical norms. April is forecast to see 1.86 million TEU. That’s about on par with the monthly average for imports in 2019.
“Last spring and summer were the busiest ever as consumers spent freely and retailers brought in merchandise to meet demand,” said NRF Vice President for Supply Chain and Customs Policy Jonathan Gold, in a statement. “This year won’t repeat that, but the numbers we’re expecting would have been considered normal before the pandemic.”
The slowdown in imports has been coupled with a dramatic fall in freight rates. According to the Drewry World Container Index, the price of a 40-foot container is now $1,710. That’s 84% below the peak of $10,377, which was reached in September 2021.
“Compared with last year, the flow of import containers on the West Coast continues to decline along with demand as carriers increasingly drop service to Los Angeles-area ports but stretch voyages to include other ports of call to help absorb excess capacity,” Hackett Associates Founder Ben Hackett said. “Meanwhile, freight rates have been impacted by the fall in demand, but new ships are starting to show up and more have been ordered – a sign that carriers expect demand will improve by the time the new vessels are delivered.”
While the volume totals are showing signs of moving past the disruptions of the last two years, labor negotiations on the West Coast ports still remain unresolved. This raises the specter of a potential disruption. Contract negotiations have been stalled between the International Longshore and Warehouse Union and the Pacific Maritime Association.
Workers mostly remained on the job since the last agreement expired July 1, but cracks are starting to show as tensions rise. On Thursday and Friday, the ports of Los Angeles and Long Beach were shuttered as a result of manpower shortages that stemmed from the labor dispute. These are the nation's largest ports, so it will leave some cargo in limbo heading into the Easter weekend. Throughout the year, some cargo has been shifted to other ports on the East Coast and elsewhere to avoid any issues.
"The priority at the moment is resolving labor negotiations at the West Coast ports and avoiding any self-inflicted supply chain challenges on top of those we’ve faced the past three years," Gold said.
The retailer's marketplace is expanding quickly.
When it comes to ecommerce growth, was the pandemic a blip or a new trendsetter?
As we move further from the height of COVID-related closures, it’s a question that will start to be answered through the lens of history.
So far, the narrative of ecommerce growth in the U.S. from 2019-2022 has gone like this: Ecommerce’s share of overall retail saw a huge spike at the height of the pandemic in 2020-21, when goods in general were in demand and online shopping was necessary to preserve health and safety. Experts looked out and saw a permanent exponential change in the penetration of ecommerce as a share of retail that would last beyond the pandemic. Then, in 2022, everyone went back to stores and the trendline came back to 2019 levels. Growth was no longer exponential. There was still growth, but it was not happening as fast as during the pandemic period.
With this in mind, it’s worth pointing out that 2023 is the first year that there likely won’t be a pandemic-influenced swing to influence ecommerce growth. It is also a year where demand has suffered challenges amid inflation and interest rate hikes.
So as we seek to determine the importance of ecommerce to overall retail, it’s worth it to continue taking a close look at what growth trends retailers are seeing now, whether ecommerce is remaining resilient amid consumer pullback and how retailers are preparing for the future.
The latest example arrived this week from Macy’s. It’s a fitting one for the times. Overall, Macy’s is seeing a slowdown as consumers pull back on discretionary purchases, with sales declining 7% in the first quarter versus the same quarter of 2022. Digital sales were down 8%.
Macy’s is particularly susceptible to the macroeconomic headwinds that many brands and retailers are facing, as spending among the middle-income consumers it counts as a primary customer base is particularly softening, said GlobalData Managing Director Neil Saunders.
But while ecommerce is slowing overall, the importance it gained to Macy’s business during the pandemic is remaining in place.
In 2019, ecommerce made up 25% of Macy’s revenue, CEO Jeff Gennette told analysts on the company’s earnings call. That jumped to a high of 44% in 2020. By 2022, digital reached 33% of sales after the pandemic boom. In the first quarter of 2023, it remained at 33%. So, while the trend line dipped after shoppers returned to stores, ecommerce share still settled in at a higher post-lockdown point than it was before the pandemic.
This came in a quarter in which traffic was “relatively good” across both online and in-store, Macy’s CEO Jeff Gennette said. It was “flattish” online, and slightly up in stores.
“We do expect that this is the reset year with the penetration between them,” Gennette said. “But we do expect more aggressive growth in digital in the future versus stores as we think about '24 and beyond. And that's going to be foisted by a lot of ideas and strategies.
Over the last year, the retailer has made investments in boosting ecommerce, even as shoppers returned to stores. In a bid to boost the assortment of goods available online, Macy’s launched a marketplace in September 2022 that welcomes goods from third-party sellers.
The marketplace had an “outstanding” first quarter, said Macy’s President Tony Spring, who is poised to succeed Gennette as CEO next year. Gross merchandise value increased over 50% when compared to the fourth quarter of 2022, while the average order value and units per order for marketplace customers was 50% above those not shopping at the marketplace.
Macy’s is continuing to build the marketplace even as it racks up sales. The retailer added 450 brands, ending the quarter with 950 brands.
This is helping to draw in new customers, as well as younger existing customers who are buying more items, resulting in increased basket size.
“We're very excited as to how marketplace is really attracting the Gen Z customer, particularly in categories where it was not economically feasible for us to carry in the past,” Gennette said.
In the end, Gennette said a strong digital and social presence is key to attracting younger consumers. That's a different type of shopper than other age groups.
“We know the younger customer starts first online,” Gennette said. That behavior will still be in place as the generation gets older, and gains more buying power in the process.
Going forward, Macy’s is seeking to expand the model to other retail banners in its portfolio. Bloomingdale’s will open a marketplace in the early fall.
The Macy’s ecommerce trajectory isn’t that different from the wider U.S. ecommerce narrative detailed above. With one quarter of 2023 data, there is evidence that ecommerce share settled out at a higher point after the pandemic than where it started before COVID arrived. There is flattening now, but the retailer is taking it not as a sign of a slowdown, or a signal to change course. Rather, it sees changing consumer behavior as a reason to build for the future.