Forecasts for U.S. Container Imports Point to Slow Increases
After a prolonged downturn in container volumes, analysts are reporting that the volumes appear to have finally begun to rebound and are expected to begin a slow increase starting to rise from the lows experienced in the second half of 2022 and the first half of 2023. At the same time, the National Retail Federation, the trade group for U.S. retailers, reports that the industry has begun to focus on holiday season sales and after lowering inventories is starting to increase U.S. import volumes.
“In August, U.S. import container volume flattened and is still relatively consistent with the peak season patterns we would see pre-pandemic,” said Chris Jones, EVP Industry Descartes, a provider of software services to logistics-intensive businesses. They are noting a small month-to-month increase in U.S. import volumes in August compared to July.
The retailers echoed a similar outlook for imports. After having lowered its forecast for retail container imports in August, the NRF is now forecasting three months of sustained levels of more than 2 million TEUs per month. They report July was up more than four percent from June and expect a further increase for August. Which will also be the first month to reach 2 million TEU since October 2022.
“These are strong numbers and a sign retailers are optimistic about the holiday season since they don’t import merchandise unless they think they can sell it,” said Jonathan Gold, NRF Vice President for Supply Chain and Customs Policy. “The holiday season is now the top priority for everyone in the retail supply chain as merchants prepare for the rush of shoppers.”
The NRF is forecasting starting next month, October, retailer imports will start to exceed the reduced levels seen a year ago and November and December will see increases above 10 percent from last year’s reduced levels. They expect that the year will still be down 12.5 percent from 2022 but that the momentum in the fourth quarter will carry into the beginning of 2024.
They increased their forecast for fourth quarter imports to reach a total of 5.9 million TEU up one percent from last month’s forecast.
Descartes is also reporting a strengthening of West Coast U.S. imports after the long negotiations for a union contract. After the disruptions in late June and early July, Descartes reports that imports at U.S. West Coast ports were up 3.6 percent in August versus July. The West Coast they said is back to nearly a 42 percent market share. By comparison, U.S. East Coast ports from New York to Savannah all saw declines in month-to-month volumes in August, but Descartes points out that the Gulf ports remained strong.
“We can expect some of the 1 million TEUs that left to come back now that the uncertainty is gone,” Jones told Reuters.
Both Descartes and NRF report despite the headlines about long waits and disruptions at the Panama Canal, overall, they have seen little impact on container shipping. They note that transit times have remained consistently low but speculated that Panama Canal concerns might spur some importers to return to the West Coast ports to avoid the uncertainty at the canal much as they left the California ports due to the uncertainty for the past year around the labor issue.