A new forecast from the National Retail Federation (NRF) predicts that import cargo volume at major container ports in the United States will reach its lowest level in almost three years in February. The NRF, which represents the nation's retailers, has once again revised its forecast downwards, anticipating a decline in imports compared to both its previous lowered expectations and the surge levels experienced a year ago.
The NRF's monthly Global Port Tracker report monitors container volumes at major ports on the East and West coasts, as well as in the Gulf of Mexico. The NRF now expects a total of 8.9 million twenty-foot equivalent units (TEU) during the first five months of the year, compared to last month's forecast of 9.23 million TEU, representing a further decline of 3.6 percent.
This forecast of 8.9 million TEU is a 21 percent drop from the record import volumes seen in the first five months of 2022. The NRF has lowered its projections for both January (by 6.8 percent) and February (by an additional 3.7 percent). According to the Global Port Tracker, only February and March of 2020, with 1.51 million TEU and 1.37 million TEU respectively, have recorded lower numbers than the projected 1.57 million TEU for February 2023.
Jonathan Gold, NRF Vice President for Supply Chain and Customs Policy, commented on the situation, noting that these are the lowest numbers seen in almost three years for February. Retailers are exercising caution as they observe how the economy responds to measures aimed at curbing inflation. Concerns about rising interest rates and persistent inflation have led to a slowdown in the U.S. economy, resulting in reduced merchandise imports.
Executives across the shipping industry have identified retail inventories and shipments as crucial factors that will impact container volumes in 2023. For instance, Jeremy Nixon of Ocean Network Express pointed out that high retail stock levels contributed to declining results in the fourth quarter of 2022, and recovery would depend on when retailers start importing new inventory from Asia. Some forecasts suggest that volume recovery may not occur until mid-2023 or later.
Ben Hackett, Founder of Hackett Associates, drew parallels between 2023 and 2020, when the global economy faced uncertainty due to the pandemic. He highlighted the contradiction of rising employment and wages promising prosperity alongside the threat of a recession posed by high inflation and increasing interest rates.
In December, U.S. ports covered by the Global Port Tracker handled 1.73 million TEU, down 2.6 percent from November and 17.1 percent from December 2021. The annual total for 2022 reached 25.5 million TEU, a decrease of 1.2 percent compared to the record set in 2021. Import volumes stabilized in July and August 2022, followed by year-over-year declines starting in September, which grew in magnitude throughout the rest of the year.
The NRF projects that monthly import volumes will remain below the levels of the previous year for at least the first six months of 2023. June 2023 is the first month expected to reach 2 million TEU, marking the first time since October that imports are projected to reach that level. Monthly volumes peaked at 2.4 million TEU in May 2022. For the first half of 2023, the NRF forecasts volumes of 10.9 million TEU, down 19.4 percent from the same period in 2022.