Port Tracker report calls for lower U.S.-bound import levels over balance of 2023

United States-bound retail container import volumes are expected to lessen over the balance of 2023, according to the new edition of the Port Tracker report, which was issued this week by the National Retail Federation (NRF) and maritime consultancy Hackett Associates.

The ports surveyed in the report include: Los Angeles/Long Beach; Oakland; Tacoma; Seattle; Houston; New York/New Jersey; Hampton Roads; Charleston, and Savannah; Miami; Jacksonville; and Fort Lauderdale, Fla.-based Port Everglades.

Authors of the report explained that cargo import numbers do not correlate directly with retail sales or employment because they count only the number of cargo containers brought into the country, not the value of the merchandise inside them, adding that the amount of merchandise imported provides a rough barometer of retailers’ expectations.

“Retailers expect record-setting sales during the holiday sales season this year, and they have their shelves stocked to meet demand whether it’s in stores or at distribution centers to fulfill online orders,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said in a statement. “Port, railroad and delivery service labor contract issues that caused worries earlier in the year are behind us, and the supply chain is running smoothly. Shoppers should have no trouble finding what they want this year.”

This report follows NRF’s holiday season sales projections, which were issued last week. NRF defines holiday sales as sales occurring between November 1 and December 31, excluding automobile dealers, gasoline stations, and restaurants, to focus on core retail. As was the case a year ago, NRF’s holiday sales forecast numbers are optimistic and positive, with 2023 holiday season retail sales pegged to be up 3%-to-4% annually, coming in between $957.3 billion and $966.6 billion.

For September, the most recent month for which data is available, Port Tracker reported that import volume, for the ports covered in the report, came in at 2.03 million Twenty-Foot Equivalent Units (TEU), down 0.2% annually and up 3.5% compared to August. What’s more, the report observed that this tally marked the first time imports have eclipsed the 2 million TEU mark going back to October 2022, adding that September represents the highest-volume month of 2023 year-to-date and “should go down as the peak of the holiday shipping season.”
Port Tracker issued projections for October and the subsequent months, including:

• October, at 1.92 million TEU, for a 4.2% annual decrease
• November, at 1.88 million TEU, for an 5.8% annual increase, which would mark the first annual gain since June 2022;
• December, at 1.85 million TEU, for a 6.8% annual increase;
• January, at 1.87 million TEU, for a 3.7% annual increase;
• February, which is typically the slowest month of the year, due to Lunar New Year factory shutdowns in Asia at 1.72 million TEU, for an 11.1% annual increase; and
• March, at 1.73 million TEU, for a 6.2% annual increase

The report said that should its projections for the remainder of 2023 come to fruition, the full-year total, at 22.1 million TEU, which would mark a 13.5% annual decline compared to 2022’s 25.5 million TEU, which was off 1.2% annually compared to 2021’s all-time high of 25.8 million TEU.

Hackett Associates Founder Ben Hackett wrote in the report that while the economy appears to be in what he called a sustainable growth mode, it should serve as an indication that the economy has survived both the pandemic and inflation without a recession, as overall inflation is coming down, coupled with the unemployment rate holding mostly steady. But he added that there is a disconnect among economists, in terms of the direction of the economy, with part of that disconnect stemming from interest rates, specifically the time lag between when rates are increased and when the rates are seen.  

“Long-term rates have been relatively low while short-term rates were creeping up. This has now reversed, and long-term rates have returned to normal but short-term rates are at a 15-year high,” he wrote. “This is a strong signal that mortgages will rise further, increasing the pressure on the housing market, and also impacts investments. Car and grocery prices remain high, and consumers feel this directly in their pockets, causing a reduction in discretionary spending that will further reduce retail imports.”

What’s more, he added that this is impacting ocean carriers’ operational decision-making, in that they have slowed down their ships in an attempt to cut capacity without having to take vessels out of service as new, larger ones ordered when demand was higher are delivered.

“Ships are not sailing fully loaded, and freight rates are declining as a result,” he wrote. “That’s a further indication that no cargo growth from current levels is expected on the near-term horizon. Perhaps 2024 will be better.”