Feeling pandemic’s brunt, U.S.-bound port volumes see further declines, reports Port Tracker

By Jeff Berman, Group News Editor · April 7, 2020

With no clear end to the coronavirus, or COVID-19, pandemic in sight, the new edition of the Port Tracker report, which was issued today by the National Retail Federation (NRF) and maritime consultancy Hackett Associates, continues to point to declining inbound volumes for major United States-based retail container ports.

The ports surveyed in the report include: Los Angeles/Long Beach; Oakland; Tacoma; Seattle; Houston; New York/New Jersey; Hampton Roads; Charleston, and Savannah; Miami; Jacksonville; and Fort Lauderdale, Fla.-based Port Everglades.

Authors of the report explained that cargo import numbers do not correlate directly with retail sales or employment because they count only the number of cargo containers brought into the country, not the value of the merchandise inside them, adding that the amount of merchandise imported provides a rough barometer of retailers’ expectations.

NRF Vice President for Supply Chain and Customs Policy Jonathan Gold noted in the report that even with factories in China getting back online, there still remains fewer U.S.-bound imports than were initially expected.

“Many stores are closed, and consumer demand has been impacted with millions of Americans out of work,” said Gold in a statement. “However, there are still many essential items that are badly needed and because of store closures cargo may sit longer than usual and cause other supply chain impacts.”

In the previous edition of the Port Tracker report, Gold said there are various unknowns to fully determine the impact of the coronavirus on the supply chain, adding that even as factories in China continue to come back online, with products now flowing again, there are still issues affecting cargo movement, including the availability of truck drivers to move cargo to Chinese ports. And he also noted that retailers are working with both their suppliers and transportation providers to find paths forward to minimize disruption.”

These factors were supported in a separate survey of NRF members, which showed that 40% of respondents indicated they are seeing coronavirus-related issues to the supply chains, with 26% expecting to see disruptions while it continues to be monitored.

Port Tracker found that, for the U.S.-based ports covered in the report, February saw 1.51 million TEU (Twenty-Foot Equivalents) handled, which represents the most recent month for which data is available. This marked a 17% decline compared to January and a 6.8% annual decrease. The report noted that February is typically a low volume month, due to the Lunar New Year and factory shutdowns in China, and this past February saw longer than usual shutdowns that bled into March because of coronavirus.

March was estimated to hit 1.27 million TEU for a 21.3% decrease, which would represent the lowest monthly tally going back to February 2015’s 1.21 million TEU. That reading came during the West Coast port labor disputes, which saw slowdowns at various ports in the region. April was pegged at 1.44 million TEU, for a 17.6% annual decline, with May, at 1.48 million TEU, poised to fall by 20.1%. June is projected to hit 1.41 million TEU, for a 21.4% decline, and July is projected to fall 18.2%, to 1.61 million TEU.

Port Tracker made it clear that coronavirus is having a major impact on port volumes, noting that prior to it beginning to negate expected import levels, the tally for February through May had fallen from a 6.9 million TEU forecast to 5.7 million TEU, a 17.3% decline. What’s more, it had pegged monthly volumes to hit the 2 million mark by May, with February 2017 marking the last time monthly volumes were less than 1.5 million TEU.

Port Tracker observed that the first half of 2020 is forecasted to come in at 8.93 million TEU, down 15.1% annually, adding that before the extent of the pandemic was known, it was expected to hit 10.47 million TEU.

Hackett Associates Founder Ben Hackett wrote in the report that the COVID-19 pandemic is unraveling the economy nationally and globally as most of the world moves toward a lockdown that entails the closure of significant portions of both the service and manufacturing industries.

“Staying at home may be safer than going to work but it is creating a disastrous situation for the economy,” he wrote. “The lack of global leadership to push for international coordination is very telling, and the lack of consistent U.S. policy will make the impact on economic growth dramatic. We are seeing projections that annualized gross domestic product will drop as much as 38 percent in the second quarter and 5.5 percent for the year. The economic disaster is almost unfathomable… As the world shuts its doors the question is what will be the long-term effect? Possibly a shift to greater national production of goods aided by automation to keep the cost manageable: not an end to globalization but certainly a shift to increased nationalism. The move to create more distributed supply chains that was already underway will no doubt also increase in pace.”

April 7, 2020