US retailers on Tuesday raised their projections for imports through April, portending a worsening of port congestion on the West and East coasts that would mean no relief for the domestic supply chain before the beginning of the peak shipping season in late summer.
Imports are forecasted to be at near-record levels this spring and summer, with consumer demand remaining strong and supply chain bottlenecks showing no signs of improvement, according to the Global Port Tracker (GPT) published by the National Retail Federation (NRF) and Hackett Associates.
“Growth rates have slowed down from the off-the-charts numbers we saw last year, but volume is close to the highest we’ve ever seen,” said Jonathan Gold, the NRF’s vice president for supply chain and customs policy.
GPT said February import volumes, when tabulated, will be up 10.5 percent year over year. A month ago in the February GPT, the forecast was for an increase of 8.7 percent.
Imports in March are projected to decline 4.5 percent, due primarily to February’s factory closings in Asia for the Lunar New Year. But that’s an increase from last month’s GPT, which expected March imports to fall 6.7 percent year over year. April imports are now forecasted to increase 4.2 percent year over year, up from the previous projection of a 2 percent gain.
GPT expects May imports to dip 3.2 percent before gains in June (4 percent) and July (3 percent).
Backlog of vessels, containers
While import growth volumes going forward will be in the single digits, which is down considerably from the overall 17.4 percent increase in 2021 according to Global Port Tracker, ports on both coasts have yet to clear the backlogs of vessels and on-terminal containers that have accumulated in recent months.
“Congestion continues on both coasts, with ships queueing for berths at multiple ports,” said Ben Hackett, founder of Hackett Associates. Data from PIERS, a JOC.com sister company within IHS Markit, shows that US ports have been handling record or near-record import volumes for 20 consecutive months since the economy began to re-open after the COVID-19 lockdowns in the first half of 2020.
A major source of congestion at US ports is the stressed inland supply chain, Hackett noted. “Until supply chain problems are sorted out with more drivers, trucks and inland storage space, we do not expect to see a rapid decline in the backlogs being experienced,” he said.
Industry analysts who addressed JOC’s TPM22 conference in Long Beach last week were not optimistic about a resolution to supply chain issues until after peak season 2022. Analyst Lars Jensen, CEO and partner of Vespucci Maritime, said the trans-Pacific supply chain could return to normal by the end of 2022 “if we are lucky,” but more likely in 2023.
Contact Bill Mongelluzzo at bill.mongelluzzo@ihsmarkit.com and follow him on Twitter: @billmongelluzzo.
