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While their government handed out copious financial aid during the COVID-19 pandemic, Americans dutifully spent that money on consumer goods, creating a boom in imports that clogged shipping lanes and docks across the country. Now, those imports are declining as Americans face heightened inflation and declining COVID assistance. Paul Page reports in The Wall Street Journal:
U.S. ocean imports closed 2022 extending a monthslong slide closer to prepandemic levels, according to a new report, leaving the shipping sector bracing for deeper declines in container volumes this year.
American ports handled 1,929,032 inbound containers in December, measured in 20-foot equivalent units, or TEUs, down 1.3% from November, according to a report released Tuesday by Descartes Datamyne, a trade intelligence database owned by supply-chain software company Descartes Systems Group Inc. December marked the lowest level for seaborne imports since June 2020, just before a pandemic-driven rush to restock depleted inventories triggered a surge in imports.
The December box volumes were 19.3% behind container imports the same month the year before, Descartes Datamyne said, and 1.3% greater than December 2019, before the spread of Covid and city lockdowns in early 2020 sent global trade spiraling downward.
Signs are pointing to U.S. international trade declining amid a broader global slowdown as inflation takes a toll on consumer demand. U.S. imports by value dropped 6.4% from October to November, the Commerce Department said last week.
U.S. container imports overall fell 2.8% last year from 2021, according to Descartes Datamyne figures, but the 28,276,129 containers were still 18.5% ahead of 2019 volumes.
U.S. import volumes are tumbling from record-high demand that swamped U.S. ports during the second half of 2021 and the first half of 2022, as retailers tried to keep up with strong consumer demand and to restock warehouses and stores.
Bottlenecks at U.S. gateways have eased since last year, but new projections suggest shipping volumes will fall at an even steeper pace in the first half of this year.
The Global Port Tracker report produced by Hackett Associates and the National Retail Federation, released Monday, estimates January import volumes will fall 11.5% from last year and February imports will slide 23% to about 1.61 million TEUs. That would put trade behind the prepandemic levels and roughly equivalent to imports in early 2020, when Covid lockdowns crashed global shipping volume.
“After nearly three years of Covid-19’s impact on global trade and consumer demand, import patterns appear to be returning to what was normal prior to 2020,” said Hackett Associates founder Ben Hackett.
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