COVID and Retail Sales Wane
Consumer spending appeared strong through the holiday shopping season and is anticipated to increase as inflation eases. However, the outlook for the first quarter of 2023 continues to forecast declines in import volumes and the National Retail Federation (NRF) forecasts that importations into the U.S. in February 2023 will be lower than in June 2020.
The NRF projects that imports for February 2023 are anticipated to decline by 23 percent from February two years ago. After the nearly three long years of COVID-19’s impact on global trade and consumer demand, the NRF predicts that import volumes may level off near the 2020 rate.
Retailers are forecasting a double-digit, year-over-year decline in U.S. imports for Spring 2023 for every month from February through May this year. However, inflation is anticipated to fall in the coming months, so demand for imported goods is likely to slowly return during the second half of the year.
West Coast Seaport Uncertainty – Continues
The International Longshore and Warehouse Union’s (ILWU) and Pacific Maritime Association’s (PMA) contract negotiations, which began in May 2022, have not yet yielded a contract. Labor continues to work without a new, signed agreement and the current agreement expired in July 2022. This situation continues to present uncertainty for shippers, as vessel carriers continue to divert cargo from the West Coast ports to eastern and southern hubs to avoid potential disruptions should the contract talks cease. Shippers’ concerns remain high, which has resulted in a big drop in container volume at the twin ports of Los Angeles and Long Beach, which are the nation’s biggest ports on the West Coast.
Projections for the West Coast’s share of U.S. imports from Asia are anticipated to continue a downward trend during the first quarter of the year. There is little hope for change until the ILWU and PMA reach an agreement and present a contract to the union members for ratification.
U.S. Seaports Are Cleared and not Congested
The devastating congestion problems that occurred in 2022 have nearly disappeared in most ports. With the exception of Houston, most major seaports are no longer experiencing the backlog caused by excessive on-dock dwell time. Longshore and trucker productivity has increased dramatically, and cargo has cleared out, allowing most terminals to operate within normal time frames.
For any questions regarding this update, please contact your Western Overseas representative.