US Retailers Up Holiday Import Projections As Cargo Moves Through Congested Ports

US retailers are increasing their import projections for November through January because they expect merchandise that has been sitting on vessels stranded offshore major gateways will come flooding into the country in time for the holidays.

Speeding the discharge of import containers from vessels and through congested marine terminals is becoming increasingly urgent as retailers rebuild their depleted inventories, let alone stock store shelves for holiday sales. The US Census Bureau reported that the retail inventory-to-sales ratio edged up only slightly in August to 1.10 from a record-low 1.07 in July. In pre-COVID August 2019, the inventory-to-sales ratio was 1.45.

The National Retail Federation (NRF) projects that holiday sales this year will grow between 8.5 percent and 10.5 percent from last year.

“Dockworkers are unloading ships as fast as they can, but the challenge is to move the containers out of the ports to make room for the next ship,” Jonathan Gold, NRF’s vice president for supply chain and customs policy, said Monday in the November Global Port Tracker.

Terminal congestion and vessel bunching at major import gateways such as Los Angeles-Long Beach, the Northwest Seaport Alliance (NWSA) of Seattle and Tacoma, and Savannah after 15 consecutive months of record or near-record imports from Asia have left hundreds of thousands of laden import containers stranded on vessels idled at anchor.

That means import volumes that should have been recorded in recent months have not yet been landed on shore.

But retailers indicate greater focus on supply chain cooperation will result in laden import containers moving more swiftly through port-related supply chains. Global Port Tracker now projects that imports in November will increase 3.3 percent from a year ago, compared with last month’s forecast for a 2.9 percent increase. The December projection now calls for a 3.5 percent increase, up from a decline of 0.2 percent projected in the October port tracker. And imports are now projected to increase 7.6 percent in January, up from last month’s projection of a 5.7 percent jump.

Port congestion in the US, power production shortfalls in China, vessel bunching outside of US ports, warehouses filled beyond capacity, chassis shortages, and congestion at inland rail ramps have been holding down the movement of product from factories in Asia to store shelves throughout the US.

Ports and terminal operators are deploying a variety of measures to speed the discharge of import containers from vessels and through congested terminals to retailers’ warehouses. The ports of Los Angeles and Long Beach and two terminal operators in Tacoma have announced fees, ultimately aimed at retailers, for what they call long-dwell containers that sit on marine terminals beyond stipulated storage deadlines.

Global Port Tracker projects that calendar year 2021 will mark the second consecutive year of record US imports. Containerized imports this year are projected to increase 17.9 percent from 2020. Imports last year increased 1.9 percent from 2019 despite the double-digit drop in imports during the first half of 2020 due to COVID-19, according to Global Port Tracker.

Source: Journal of Commerce