Photo: RetailWire
New research forecasts that imports to American ports will fall to the lowest level in nearly two years by the end of 2022.
The National Retail Federation and Hackett Associates last week released their monthly Global Port Tracker, which found that U.S. ports in August handled 2.26 million twenty-foot equivalent units (TEU) — 20-foot containers or their equivalent — representing a 0.4 percent decline from the year prior.
The final numbers are not yet in for September but those are expected to report a three percent year-over-year drop. NRF is forecasting imports to fall 4.9 percent in November and 6.1 percent in December. The December forecast, if correct, would represent the lowest level of TEUs since February 2021.
“The holiday season has already started for some shoppers and, thanks to pre-planning, retailers have plenty of merchandise on hand to meet demand,” NRF vice president for supply chain and customs policy Jonathan Gold said in a statement. “Many retailers brought in merchandise early this year to beat rising inflation and ongoing supply chain disruption issues.”
“The growth in U.S. import volume has run out of steam, especially for cargo from Asia,” Hackett Associates founder Ben Hackett said. “Recent cuts in carriers’ shipping capacity reflect falling demand for merchandise from well-stocked retailers even as consumers continue to spend. Meanwhile, the closure of factories during China’s October Golden Week holiday along with the Chinese government’s continuing ‘Zero Covid’ policy have impacted production, reducing demand for shipping capacity from that side of the Pacific as well.”
Some of what’s going on at retail could be attributed to retailers thinking ahead to avoid getting stuck without inventory for the holidays, but that’s not the full story. Many are sitting on merchandise that they chose to pack-and-hold during the pandemic and are now looking to turn. Others placed big orders early on with the expectations that consumers would continue high levels of discretionary spending despite rising prices.
The Washington Post, citing Census Bureau data, reports that U.S. retailers’ inventory levels were at a record $732 billion in July. That’s a 21 percent jump from the year prior.
Retailers, including Amazon.com, Target and Walmart, all with their own excess inventory issues, are running Christmas sales promotions this month in an effort to get a head start on the holidays and also bring their stock into a state of equilibrium with demand.
- Imports Headed to Lowest Level Since Early 2021 But Retailers Are Well Stocked for Holidays – National Retail Federation
- Retailers’ stockpiles mean deep holiday discounts starting now – The Washington Post
- Amazon is not letting Walmart and Target get a head start on Christmas – RetailWire
- Did Target just move Black Friday up to October 7? – RetailWire
- Did Walmart just guarantee it will be the easiest place to shop for Christmas? – RetailWire