Retailers Again Cut Forecasts for U.S. Imports as Global Trade Slows

slowing global trade lowers import forecast
Slowing global trade is contributing to declines in port volume (Long Beach file photo)

Published Nov 8, 2022 6:32 PM by The Maritime Executive

As global trade continues to slow, its is impact the shipping industry as well as ports and related businesses. The effects are beginning to show in more forecasts with the National Retail Federation, for example, today lowering its projection for U.S. imports. While still forecasting a “healthy” and “positive” holiday retailing season in the United States, they foresee an accelerating decline in imports into 2023.

“Global trade is showing an unsteady path, even if this development is not evenly distributed across all countries,” notes Vincent Stamer, Head of Kiel Trade Indicator, in the latest update on the widely followed economic report for Germany and the EU. According to the latest data update by the Kiel Trade Indicator for October, world trade volumes declined slightly month-on-month – overall by 0.8 percent (price and seasonally adjusted). Within the EU, import levels were flat with the previous month while exports were up just slightly, while in the United States imports were also flat while exports dropped nearly three percent.

In their update, the economists at the Kiel Institute noted that as trade has eased, containership congestion around the globe continues to show signs of easing “at a high level.” They now estimate that 10 percent of all goods shipped worldwide are in congestion.  

”The significant drop in freight rates is a positive impulse for global trade,” noted Stamer. “If rates remain low and global shipping congestion continues to ease, low transport costs could partly counteract fears of recession in exporting industries.”

Reflecting the changing market dynamics and economic concerns, however, in the United States the National Retail Federation has again lowered its forecast for retail imports at the major U.S. container ports. In its monthly Global Port Tracker, the retailing group is now forecasting monthly declines of between 8.5 and 9.0 percent in the last quarter of 2022 versus a year ago. They lowered their forecast to a total of 5.84 million TEU at the major US ports in the fourth quarter, down a further two percent from last month’s forecast of 5.97 million TEU. November is forecast at 1.92 million TEU, down 9.2 percent year-over-year, which the NRF notes would be the lowest number since 1.87 million TEU in February 2021.

“Cargo levels that historically peak in the fall peaked in the spring this year as retailers concerned about port congestion, port and rail labor negotiations, and other supply chain issues stocked up far in advance of the holidays,” said Jonathan Gold, the NRF’s Vice President for Supply Chain and Customs Policy. He believes that the majority of holiday merchandise is already on hand. With retail inventories high they are not bringing in the traditional fall peak for imports.

Despite the economic concerns, the NRF recently forecast a positive but lower sales increase for the 2022 holiday season. They projected that holiday retail sales in the U.S. during November and December will grow between 6 and 8 percent over 2021 to between $942.6 and $960.4 billion. Last year’s holiday sales grew 13.5 percent while the 10-year average increase is approximately 5 percent.

“We expect the flattening of demand that began around the middle of this year to continue into the first half of 2023,” said Ben, founder of Hackett Associates that prepares the tracker with the NRF. “This will depress the volume of imports, which has already declined in recent months.”

After a strong start to 2022, their forecast is now calling for the year to end flat with 2021. The NRF lowered its forecast for the full year from 26 million TEU to a current projection of 25.86 million TEU.

Looking forward to 2023, the retail trade association expects the rates of decline to further accelerate. January 2023 is forecast at 1.98 million TEU, down 8.4 percent, while February could see a 19 percent drop to 1.71 million TEU and only a slight recovery in March with a 15.2 percent decline to 1.99 million TEU. The NRF notes that its February 2023 forecast is for the lowest level since June 2020. The NRF’s projections call for a nearly one million TEU decline in total U.S. container imports in the first quarter of 2023.