Tie-Ups Starting to Ease in US Ports, but Supply to Remain Tight, Says NRF

Port congestion that has plagued U.S. retailers since August is showing signs of easing, but the "unprecedented import surge" will stretch through summer, said the monthly Global Port Tracker, released Wednesday by the National Retail Federation and Hackett Associates. “We’ve never seen imports at this high a level for such an extended period of time,” said Jonathan Gold, NRF vice president-supply chain and customs policy.

Import records have been “broken multiple times and near-record numbers are happening almost every month,” said Gold, attributing surging shipments to consumer spending spurred by federal stimulus checks and “money saved by staying home for the better part of a year.” Consumers have “money in their pockets and they’re spending it with retailers as fast as retailers can stock their shelves.”

Imports hit their lowest point in four years in March 2020, when effects of the pandemic first hit, dropping to 1.37 million 20-foot equivalent units (TEU), said the report. They rebounded in August when the economy began to reopen, then peaked at 2.21 million TEU in October, said the tracker. The latest forecast is for volume to remain at or above 2 million TEU for 11 out of 13 months by August; before 2020, monthly imports had reached 2 million TEU only once, in October 2018.

Months of backups at ports -- which faced labor shortages due to COVID-19 and equipment shortages because of volume -- constrained the global supply chain, NRF said. The recent Suez Canal tie-up and other disruptions compounded the gridlock, it said.

But congestion at U.S. ports “is abating as container carriers and terminals adjust to the new normal,” said Hackett Associates principal Ben Hackett, noting that after the “busiest February on record,” the number of ships in San Pedro Bay waiting to dock in Los Angeles “is dropping.” Seventeen ships were recently reported waiting off the nation’s busiest port complex of Los Angeles and Long Beach, California, vs. 30 a month ago, Hackett said.

U.S. ports covered by Global Port Tracker handled 1.87 million TEU in February, the latest month available, down 9.1% from January but still the busiest February since NRF began tracking imports in 2002 and up 23.7% year on year, said NRF. March was projected at 2.07 million TEU, up 50.7% year over year, but Hackett cautioned that last year’s swings caused by the pandemic “played havoc” with year-over-year comparisons. In March 2020, many Asian factories that should have reopened after February’s Lunar New Year holiday were still closed, and U.S. businesses were starting to close to avoid spreading the virus, he noted.

April imports are forecast at 1.99 million TEU, up 23.4% year over year; May at 2 million TEU, up 30.6%; June at 2.01 million TEU, up 24.9%; and July at 2.04 million TEU, up 6.5%. In August, TEU is projected to slip 1.2% in the first year-on-year decline since July 2020. The first half of 2021 is forecast at 11.99 million TEU, up 26.9% from the 2020 period, which had a major decline in imports due to COVID-19. The 22 million TEU in 2020 were up 1.9% from 2019 and topped the previous record of 21.8 million TEU recorded in 2018, said the report.