The National Retail Federation Reveals Retail Imports Nearing Record Pace Despite Ongoing Port Congestion; Jonathan Gold and Ben Hackett Discuss
WASHINGTON, DC - With the holidays fast approaching, many buyers, suppliers, and consumers are wondering what the season will hold due to ongoing shipping issues. Despite port congestion, a monthly Global Port Tracker report from the National Retail Federation (NRF) and Hackett Associates revealed that imports are expected to remain at near-record levels for the remainder of 2021.
“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,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. “We need better empty return procedures and more chassis, truck drivers, rail capacity, and warehouse workers to keep the system moving. Retailers have enough inventory on hand to make sure shoppers won’t go home empty-handed this holiday season. But there are still items sitting on the docks or waiting on ships that need to make it to store shelves and online sellers’ warehouses. Retailers want to make sure customers have product choices.”
Last week, over 70 ships were reportedly waiting to dock at the West Coast Ports of Los Angeles and Long Beach, with the wait at Los Angeles averaging two weeks throughout the past month. According to a release, those delays have pushed back the vessels’ arrival at other port on their schedules, causing some carriers to announce plans to divert to other locations. However, congestion is still building.
These congestions and supply chain disruptions began in 2020 and have continued into the current “peak season” for shipping as retailers normally begin stocking up for the holidays. Many retailers, however, anticipated the challenges and began bringing in holiday goods months ahead of the usual schedule to ensure inventory. This year, NRF forecasts that holiday sales will grow between 8.5 percent and 10.5 percent over 2020.
“The once-vaunted supply chain continues to come under pressure from all sides,” Hackett Associates Founder Ben Hackett said, citing issues ranging from port congestion in the United States to electrical shortages impacting production in China. “It does not look like the congestion will improve any time soon, with most commentators suggesting problems will continue well into 2022—and that is assuming COVID-19 does not spike again.”
United States ports covered by Global Port Tracker handled 2.14 million twenty-foot equivalent units (TEU) in September, the latest month for which final numbers are available. While that was down 5.9 percent from August of 2021, it was up 1.4 percent year over year. A TEU is one 20-foot container or its equivalent.
Although ports have not yet reported October numbers, Global Port Tracker projects the month at 2.19 million TEU, down 1.2 percent from October 2020. If this occurs, it will be the first year-over-year decline since July 2020, after which unusually high import volumes began to arrive due to stores that were closed because of the pandemic being reopened.
Even with the year-over-year decline, October would be among the five busiest months on record since NRF began tracking imports in 2002. Busy cargo is expected to continue through the end of 2021, with November forecast at 2.17 million TEU, up 3.3 percent year-over-year, and December at 2.18 million TEU, up 3.5 percent.
Currently, January 2022 is forecasted at 2.21 million TEU, up 7.6 percent from January 2021; February projected at 2 million TEU, up 7 percent year-over-year; and March at 2.17 million, down 4.1 percent year-over-year.
Overall, the first half of 2021 totaled 12.8 million TEU, up 35.6 percent from the same period last year. For the full year, 2021 is expected to reach 26 million TEU, up 17.9 percent over 2020 and a new annual record topping last year’s 22 million TEU. Cargo imports during 2020 were up 1.9 percent over 2019 despite the pandemic.
Will these projected number meet the mark this holiday season and beyond? Stick with AndNowUKnow to receive the latest supply chain updates.