US container imports still on the decline, but the slope is easing

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Containerised imports into the US are expected to break through the 2m teu mark this month, for the first time since last October.

But according to the monthly Port Tracker, published by the National Retail Federation (NRF) in collaboration with maritime consultancy Hackett Associates, monthly volumes should slip back below that threshold for the remainder of the year.

But at least the rate of year-on-year decline is expected to shrink, it says.

Based on traffic projections at major US container gateways, Port Tracker forecasts 2.03m teu of import cargo this month, 10.2% down on August last year. But it is an improvement over July, when an estimated 1.91m teu entered the US, 12.7% lower than 12 months prior.

In June, US ports handled 1.83m teu, down 18.7% year on year, which brought the tally for the first half of the year to 10.5m  teu, 22% short of the first six months of 2022.

Hackett Associates founder Ben Hackett explained: “The discrepancy between rising growth in sales and declining cargo volumes is happening because retailers are working their way through inventory built up over the last 12-18 months. Cargo growth should resume as inventories are depleted.”

Tim Denoyer, ACT Research VP and senior analyst, who penned the CASS Freight Index for July, takes a similar view. “Declining retail sales and destocking remain the primary issues, but dynamics are shifting as real incomes improve and the worst of the destock is in the rearview mirror,” he stated.

There are questions marks over consumer spending, though, which accounts for about 70% of US GDP, so the impact could be massive.

In the NRF’s Economic Review for August, chief economist Jack Kleinhenz warned that while consumers had been spending more than last year, spending growth had slowed – owing to financial pressures like inflation and high interest rates – from 4.2% in the first quarter to 1.6% in the second.

While the decline in imports is expected to shrink, Port Tracker does not envisage inbound container throughput to grow beyond August. It projects volumes of 1.97m teu in September, 1.99m teu in October and 1.92m teu in November and December. For the full year, this points to 22.3m teu, a drop of 12.8% from 2022.

The December prediction of 1.92m teu would be a 10.7% increase on a year ago, marking a return to growth after year-on-year volume contraction this year.

However, intermodal volumes for the first week of August are not pointing to a surge in imports this month. They were down 5.2% year on year, which brought the tally for the first 31 weeks to a 9.5% drop in intermodal units moved on US rail carriers.

The view from the container carrier side is similarly subdued, noted Freightos head of research Judah Levine.

“Even as peak season gets under way, carriers are having to reduce capacity to get rates to climb, reflecting the general over-supplied state of the market as fleet sizes continue to grow.”

On the bright side, cargo owners can  look forward to a spell of business without the threat of disruption from congestion or labour confrontation, noted Jonathan Gold, NRF VP for supply chain and customs policy.

“We expect to see a smooth shipping season ahead of the winter holiday shopping season,” he said.