November 16, 2023–U.S. containerized cargo throughput for the month of October is on the rise for general imports, while the outlook for retail imports looks less robust based on projected figures by leading supply chain industry analysts.
The upbeat reports come amid a time of uncertainty for supply chains with a potential “perfect storm” of issues arising in the remaining months of 2023 and on into 2024, according to industry experts.
“I feel like there’s the potential for a perfect storm that could lead to a massive increase in volume and rates, specifically in the California ports,” said Weston LaBar, Cargomatic Chief Spokesperson and SVP of Industry Relations.
He cited the growing demand for certain kinds of commodities, the desire of retailers to restock their shelves after the holiday season and the increasingly attractive ocean carrier rates for trans-Pacific freight.
Meanwhile, Descartes Datamyne, a consultancy that projects throughput volumes reported that in October 2023, U.S. container import volume increased from September 2023 and moved significantly ahead of October 2019 imports.
U.S. 2023 imports improving over 2019
Photo Credit: Descartes Datamyne
“Instead of the peak season decline that traditionally starts in the August timeframe, import volumes continue to rise and begin to approach the levels that resulted in port congestion during the pandemic,” the publication reported.
Descartes projected that October import volumes for the U.S. were higher than October 2022 by 3.9% and up 11.4% from pre-pandemic October 2019. It said that the growth in import volume over the first 10 months of 2023 is within 3.4% of the same period in 2019.
EAST AND GULF COASTS REGAIN MARKET SHARE
Surprisingly, Decartes also reported that a comparison of total container volumes showed that the top East and Gulf Coast ports “regained their market share lead” versus top West Coast ports.
Descartes is making a projection in the absence of actual port figures for October, a risky procedure, according to the Pacific Merchant Shipping Association.
“Last month, for example, one well-known box-counter claimed that the Port of Savannah handled 230,225 inbound loads in August, while the port itself laid claim to 202,423,” the PMSA said in October.
Cargomatic figures meanwhile show that for September, all U.S. West Coast ports saw substantial increases in their loaded import throughput and topped all of the East and Gulf coast competitors.
The U.S. West Coast ports as a whole were up 16.69% year over year (yoy), while the East and Gulf coasts were down 13.56% and 12.26% respectively.
In terms of individual port leaders for the month, the Northwest Seaport Alliance of Seattle Tacoma saw the greatest percentage rise in imports across the entire nation at 31.81% yoy. It was followed by the Port of Long Beach at 19.33% and the Port of Los Angeles at 14.31%.
By contrast, New York New Jersey was down 19.93%, Charleston down 14.36%, while Virginia and Savannah also were down at 9.30% and 3.19% respectively.
THE NRF REPORTS DECLINING FIGURES
Overall, the Descartes report seemed to be in marked contrast to one by the National Retail Federation which had a very different projection of import throughput numbers for the month of October.
“With most imported holiday season merchandise already here, inbound cargo volume at the nation’s major container ports is expected to slow during the remainder of 2023,” the NRF said, citing the results of the monthly Global Port Tracker issued by Hackett & Associates.
NRF says imports slowing toward year’s end
Photo Credit: NRF
The apparent contradiction between the reports, though, is explained by the fact that they are reporting two different sets of numbers for imported goods.
The NRF is focused solely on imported goods that are sold in retail outlets, such as furniture, toys, games, and sporting goods, which Descartes includes as well as those for various industries outside of the retail trade.
So, looking at the projections again, it means that while the overall import trend is up for October, the retail trend of the import market is on the decline.
RETAILERS ALREADY STOCKED UP
NRF Vice President for Supply Chain and Customs Policy Jonathan Gold explained the reason for the reduced number of imports, saying that retailers already “have their shelves stocked” with the goods they need for the demands of consumers during the upcoming holiday season.
While the NRF does see rises of 5.8% and 6.8% in December, it claims those will not be enough to overcome the general downturn of retail imports in 2023, which will come in at 13.5% lower than 2022.
But prospects are brighter for the first quarter of 2024, the NRF said, projecting a year over year rise of 3.7% in January, a sharp uptick of 11.1% in February, and then a 6.5% rise in March.
EXPERTS ISSUE CAUTION
Despite the generally positive outlook for the next several months, the experts are nonetheless issuing cautions about potential problems.
Descartes said that the logistics metrics it is tracking for November show that “abnormal seasonal import patterns and signs that some of the key challenges to global supply chain performance in 2023 are improving, but others are not.” Descartes did not elaborate further.
Ben Hackett, founder of industry consultant Hackett Associates, which advises the NRF on monthly retail import figures, gave an upbeat view of the U.S. economy in contrast to the broader global economy, but he still cautioned against too much optimism.
“U.S. consumers stand out in the global economy as they continue to benefit from job and wage growth and are still able to dip into savings accumulated during the pandemic,” said Hackett.
“While U.S. consumers are doing well, a global recession in cargo trade could potentially affect the supply chain,” Hackett said.
Cargomatic’s LaBar summed up the situation: “There are many things going on right now that are going to dictate what 2024 looks like, both from a supply chain and a freight economy standpoint, but also from a more macro-U.S. and global economy standpoint.”
