Imports Are Still Down. How Long Can We Expect This Trend to Continue?
If anyone was hoping import numbers would see a turnaround in time for the holiday season, think again.
As inflation continues and the Federal Reserve attempts to calm demand with high interest rates, imports at the nation’s major container ports are expected to stay below last year’s levels for the remainder of 2022, according to a Global Port Tracker report released Wednesday by the National Retail Federation and Hackett Associates.
“Consumers are still buying, but the cargo surge we saw during the past two years appears to be slowing down,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. “Cargo volumes are solidly above pre-pandemic levels, but the rate of growth has slowed and even slid into negative numbers compared with unusually high volumes last year.”
Ongoing labor negotiations on the West Coast continue to pose a threat for hiccups and disruptions, as well. The International Longshore and Warehouse Union and the Pacific Maritime Association are still in talks for a new deal after their contract expired on July 1. Dockworkers and railroad workers have remained on the job, but the lack of contract leaves concerns.
“The key now is dealing with ongoing supply chain issues around the globe and with labor negotiations at West Coast ports and freight railroads,” Gold said. “Smooth operations at the ports and on the rails is crucial as we enter the busy holiday season.”
According to Hackett Associates Founder Ben Hackett, the volume of vessels still waiting to dock on the West Coast has been “reduced to near-normal.”
“But with the switch of some cargo to the East Coast, congestion and pressure on the ports has shifted to the East Coast,” Hackett said.
U.S. ports monitored by Global Port Tracker handled 2.18 million Twenty-Foot Equivalent Units (TEUs) in July, down 3.1 percent from June and 0.4 percent from July 2021. It’s only the third year-over-year decline in two years and the first since December 2021.
While numbers for August have not yet been reported, Global Port Tracker has projected the month at 2.17 million TEUs – down 4.3 percent year over year. Projections for the remainder of the year continue to trend downward: September is forecast at 2.1 million TEUs, down 1.8 percent; October at 2.1 million (down 4.8 percent); November at 2.04 million (down 3.3 percent); and December at 2.01 million (down 4 percent).
Experts say the current decline is expected to continue in January 2023, which is currently forecast at 2.11 million TEUs for a 2.6 percent decline from January 2022.