The import cargo volume at the United States’ major container ports will likely reach the highest level in a year in August 2023 as retailers are stocking up for the coming winter season, per the Global Port Tracker report released by the National Retail Federation and Hackett Associates.
The labour negotiations regarding port and package delivery hampered supply chains at the start of summer but have been resolved. Retailers are now keen to prepare for the coming winter holidays, said NRF VP for Supply Chain and Customs Policy Jonathan Gold.
He also said that supply chain disruptions might happen, but presently, holiday merchandise is coming into the US, and they are expecting a smooth shipping season after the winter holiday shopping break.
Labour Management at the West Coast Ports reached a tentative contract deal in June after a 13-day strike by port employees in western Canada that heavily affected a few retailers last month.
However, it ended with a tentative contract agreement which prevented another strike on August 1. The Canadian labour agreement was ratified on Friday, while others are still ongoing with their ratification procedures.
Founder of Hackett Associates, Ben Hackett, said that double-digit year-over-year decreases in cargo volume have happened even though consumer spending and U.S. employment have risen.
The difference between increasing sales growth and decreasing cargo volumes occurs as retailers first take out their inventory built over the last 12-18 months.
Cargo growth will continue once inventories deplete, he added.
Growth in figures
The ports in the US are estimated to handle 2.03 million TEU in August, a 10.2% year-on-year decrease, per the Global Port Tracker report released by the National Retail Federation (NRF) and Hackett Associates. This is the first time since US ports have dealt with more than 2 million TEU since Oct 2022.
After August ends, the ports are estimated to handle 1.99 million TEU and less throughout the remaining part of 2023.
According to NRF predictions, the US Ports will handle 1.97 million TEU in September, 1.99 million TEU in Oct, and 1.92 million TEU in November and December.
The ports in the US will handle around 22.3 million TEU in 2023, a 12.8% year-on-year drop. This makes it the second consecutive year that has seen a decline in cargo imports from an annual all-time high of 25.8 million TEU in 2021.
These downward import patterns and shifting supply chains portray the beginning of a new era in global shipping and trade where Western nations and China are doing more business with their political allies and less with each other, per Wall Street Journal.
According to Analysts, global trade will increase slightly this year but will come short of annual average growth rates in 2024, a prediction made based on these downward trends.
References: nrf.com, supplychainbrain
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