NRF: Imports Expected to Fall Through Holiday Season as Inventory Levels Remain High
As retail sales grow, imports are expected to fall by the end of 2022 to their lowest level in two years.
That’s according to the National Retail Federation’s and Hackett Associates’ Global Port Tracker, which monitors port data such as import volume and congestion. According to recent data, U.S. ports saw 2.26 million 20-Foot Equivalent Units (TEUs) in August, which was up 3.5% from July and down 0.4% from August 2021.
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While September’s numbers have yet to come out, the tracker expects import numbers to be down 3% year over year. Compared to last year, October imports are expected to be down 9.4%, with November down 4.9% and December down 6.1%. If these predictions materialize, December’s numbers would represent the lowest number of imports since February 2021, which was the last time the number of 20-foot containers fell below 2 million.
January 2023 will likely see another burst of import activity at 2.06 million TEUs, which would still be down 4.9% from January 2022.
The expected drop in imports can be attributed to cuts in carriers’ shipping capacity and factory closures in China, explained Hackett Associates founder Ben Hackett explained in a statement. At the same time, inventory excesses across American retailers has meant more product available in stores and storage units.
Even though import volumes are expected to drop, retailers will likely have enough product on hand, even as consumers complete their holiday shopping earlier than usual. Executives at Hibbett Sports, Genesco, Foot Locker and Macy’s have recently noted their readiness to meet demand in key categories this season due to higher-than-usual levels of inventory across the board. The excesses are largely a result of delayed orders from Q1 and Q2 that have only recently arrived, compounding existing orders for the season.
“Many retailers brought in merchandise early this year to beat rising inflation and ongoing supply chain disruption issues,” said NRF VP for supply chain and customs policy Jonathan Gold in a statement.
Despite broader headwinds in the spending environment, such as inflation and high interest rates, consumers are still shelling out for purchases. NRF’s chief economist Jack Kleinhenz said in his monthly economic review earlier this week that while the economic environment in the U.S. is “unsettling” and consumer confidence is down, spending has persisted.
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