NRF Raises First-Half US Import Forecasts Despite Red Sea Disruptions

Imports entering U.S. ports came in significantly above expectations to start 2024.

In January, major U.S. ports handled 1.96 million 20-foot equivalent units (TEUs), up 8.6 percent from 1.81 TEUs of inbound cargo taken in the year prior, and up 4.7 percent from 1.87 TEUs in December.

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The January numbers outpaced the prior inbound cargo volume outlook posted last month, which called for flat year-over-year volume growth, according to the Global Port Tracker report released Friday by the National Retail Federation (NRF) and Hackett Associates.

“This just proves that the supply chain continues to be resilient,” said Jonathan Gold, vice president for supply chain and customs policy at NRF. “Retailers and the partners continue to adjust and adapt to whatever situation is before them. The new normal for the supply chain now is being ready for whatever comes next, and being in a constant state of disruption. We’ve got the ongoing issues with the Red Sea and Suez Canal, and the challenges of the Panama Canal. And we’ve got folks now that are planning for potential disruptions in the labor negotiations on East Coast and Gulf Coast. Retailers have to be prepared now for that.”

With the opening month’s figures in tow, NRF and Hackett upgraded the forecasts for the remaining first half of 2024. The first six months of the year are now expected to total 11.5 million TEU, up 7.8 percent from the same period last year.

That’s roughly 400,000 TEUs above the 11.1 million TEUs the Global Port Tracker report predicted in February, which be a 5.3 percent increase from a year ago.

“It’s a continued expectation from consumers,” Gold told Sourcing Journal. “Consumers continue to buy. Obviously, their shopping patterns have changed to more necessity-type issues. But we’re expecting consumers to continue to buy throughout the year.”

The first-half improvement would be a stark difference from 2023, in which the first six months generated 10.5 million TEUs of inbound cargo, down 22 percent from the first half of 2022. Across all of 2023, imports totaled 22.3 million TEUs, down 12.8 percent from 2022 in what was a year marked by depressed freight demand amid lower consumer spending.

January’s data also runs in contrast to figures from the Office of Textiles and Apparel (OTEXA), which indicated that apparel and textile imports to the U.S. decreased by 1.4 percent to 6.7 billion square meters equivalent (SME) during the month.

But the increase in total inbound cargo to kick off the year represents a return to normalcy of sorts even as container shipping slowdowns persist due to ongoing Houthi attacks on commercial vessels in the Red Sea, forcing ships initially headed through the Suez Canal to divert course around Africa’s Cape of Good Hope.

“Despite the shipping disruptions caused by Houthi rebels in the Red Sea, the global trade of consumer goods, industrial materials and bulk commodities continues to flow relatively smoothly,” Hackett Associates founder Ben Hackett said in a statement.

While carriers are avoiding the Red Sea, the initial surge in shipping prices and delays is subsiding, Hackett pointed out.

According to the report, there has been an uptick in cargo shipped across the Pacific Ocean to the U.S. West Coast, while some ships are traveling across the Pacific and through the Panama Canal to reach the East Coast.

“Fear of an inflationary impact due to the raised cost of transportation should be alleviated by now. Retailers and their carrier partners are adjusting to the re-routings and new schedules, which add new costs but those can be partially offset by not having to sail up the Red Sea and not having to pay Suez Canal transit costs,” Hackett said. “This will continue until there is a resolution and freedom of navigation through the Red Sea and Suez Canal.”

Ports have not yet reported February’s numbers, but the Global Port Tracker projected the month at 1.9 million TEU, up 22.7 percent year over year.

February is traditionally the slowest month because of Lunar New Year factory shutdowns in China, but the timing of the holiday and its impact on cargo and year-over-year comparisons varies. While the Lunar New Year started Jan. 22 in 2023, the two-week celebration started Feb. 10, putting more uncertainty into the current projections.

The Global Port Tracker laid out the estimates of the next five months of imports. March is forecast at 1.77 million TEUs, up 8.8 percent from last year. April is expecting to bring in 1.84 million TEUs, a 3.1 percent annual increase.

May is expected to have the smallest year-over-year jump from 2023 totals at 0.5 percent to 1.94 million TEUs, while June’s increase bounces back up 5.7 percent to 1.94 million TEUs. And in July, ports are expected to process their most inbound cargo year-to-date, at 1.99 million TEU, up 3.8 percent from the year prior.