Retailers Forecast Lower US Import Levels for Fourth Quarter and 2023

Imports at the major container ports in the United States are expected to fall to their lowest level in nearly two years by the end of 2022 after retailers built inventories earlier and are now well stocked for year-end sales. The National Retail Federation (NRF) for the second time in two months lowered its forecast for imports for the remainder of 2022 while also now projecting further declines at the start of 2023.

“The growth in U.S. import volume has run out of steam, especially for cargo from Asia,” said Ben Hackett, founder of Hackett Associates. “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.”

The retail trade association lowered its forecast for imports at the major U.S. ports by a further three percent for the last quarter of 2022, down to 5.97 million TEU from last month’s forecast of 6.15 million TEU. During the first six months of the year, the NRF’s Global Port Tracker recorded monthly increases in year-over-year volumes of containers for a total of 13.5 million TEU in the first six months, up 5.5 percent from 2021. Import volumes however plateaued in July and August, and the NRF is now forecasting monthly declines for volumes versus 2021 in each of the remaining months this year. 

“The holiday season has already started for some shoppers and, thanks to pre-planning, retailers have plenty of merchandise on hand to meet demand,” said Jonathan Gold, Vice President for Supply Chain and Customs Policy at the NRF. “Many retailers brought in merchandise early this year to beat rising inflation and ongoing supply chain disruption issues.”

The NRF is forecasting volumes of 12.5 million TEU for the second half of 2022, which would be down four percent from 2021. For the full year, they expect import volumes to total 26 million TEU, which would be up less than one percent from last year’s record of 25.8 million TEU. The slowing of imports comes despite the NFR’s forecast that 2022 retail sales will grow between 6 and 8 percent over 2021. Sales were up 7.5 percent during the first eight months of the year.

They are also projecting that the slowdown in imports will continue into the start of 2023. The NRF is forecasting that January 2023 will be down nearly five percent from 2022 to 2.06 million TEU which would be the same as January 2021. February 2023 is forecast at 1.8 million TEU, down 15 percent from last year as the month returns to its usual slowdown because of Lunar New Year factory shutdowns each year in Asia. 

The NRF’s revised outlook is similar to reports from the major container carriers that also predicted that the markets would normalize in the later part of 2022. Mediterranean Shipping Company CEO Soren Toft warned in a Tweet yesterday that rising inflation, rising interest rates, and rising energy prices, were contributing to some difficult quarters ahead.