Retail Imports Growth Turns Negative as Fed Tries to Rein in Consumer Demand

More signs that container shipping’s pandemic-fueled bull run is starting to crack.

the National Retail Federation (NRF) on Wednesday released its latest Global Port Tracker report showing retail imports through major US container ports that were down year-over-year in July, only the third such drop in two years and the first since December 2021.

With inflation continuing and the Federal Reserve hoping to cool demand through higher interest rates, retail imports are expected to fall below last year’s levels for the rest of 2022, according to the NRF.

“Consumers are still buying, but the freight surge we’ve seen over the last two years seems to be slowing down,” said Jonathan Gold, NRF’s vice president of supply chain and customs policy.

While cargo volumes are still “solidly above pre-pandemic levels,” the growth rate has slowed and even dipped into negative numbers compared to 2021’s unusually high volumes.

“The key now is dealing with current supply chain issues around the world and with labor negotiations at West Coast ports and freight railroads. Smooth port and rail operations are crucial as we enter the busy holiday season,” added Gold.

Labor talks between the International Longshore and Warehouse Union and the Pacific Maritime Association continue after the last contract expired on July 1. Meanwhile, the freight railroads and their union have continued to negotiate after the recommendations of the appointed Presidential Emergency Board were published this summer. While both dockworkers and rail workers remain on the job, there are concerns about potential disruption the longer they continue.

“The number of vessels waiting to dock on the West Coast has dropped to near normal,” said Ben Hackett, founder of Hackett Associates, which produces Global Port Tracker on behalf of NRF. “But with some of the cargo shifting to the East Coast, the congestion and pressure on ports has shifted to the East Coast. The land-based supply chain, particularly rail, continues to face difficulties that have resulted in containers leaving ports being delayed, causing congestion at terminals that affects carriers’ ability to unload their cargo.”

As for the numbers, the US ports covered by Global Port Tracker handled 2.18 million TEUs in July, which is the latest month for which final numbers are available. That was down 3.1 percent from June and down 0.4 percent from July 2021. July 2022 is now only the third year-over-year decline in two years and the first since December 2021.

While ports have yet to report August figures, Global Port Tracker projects the month at 2.17 million TEUs, down 4.3 percent year over year. September is forecast at 2.1 million TEUs, down 1.8 percent; October also with 2.1 million TEUs, 4.8 percent less; November with 2.04 million TEUs, 3.3 percent less, and December with 2.01 million TEUs, 4 percent less.

The anticipated declining growth follows a monster first half of the year for retail cargo imports that will boost annual cargo volumes in 2022. The first six months of 2022 totaled 13.5 million TEUs, an increase of 5.5 percent. on the pace of 2021. But the forecast for the rest of the year would take the second half to 12.6 million TEUs, down 3.1 percent year-over-year. Still, for the full year, 2022 is expected to total 26.1 million TEUs, which would be 1.2 percent higher than last year’s annual record of 25.8 million TEUs.

The decline is also expected to continue in January 2023, which is forecast at 2.11 million TEUs, down 2.6 percent from January 2022, according to NRF.

The cargo data comes as NRF continues to forecast 2022 retail sales to be 6 to 8 percent above 2021. Sales rose 6 percent for the first seven months of the year.

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