Dive Brief:
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High inventories at retailers are weakening import volumes, according to Global Port Tracker’s monthly report released Tuesday by the National Retail Federation and Hackett Associates. While the import volume is expected to be down this summer, the report says that there will be a "significant uptick" right before the winter holiday season.
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Ports surveyed by Global Port Tracker handled 1.44 million Twenty-Foot Equivalent Units (TEU) in April, up 9.1% from March but down 4.6% year over year. May saw an estimated 1.54 million TEU, down 4.2% year over year.
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Volume seen by the ports in the first half of 2016 is expected to total 8.9 million TEU, up 0.3% from the same period last year. Total volume for 2015 was 18.2 million TEU, up 5.4% from 2014.
Dive Insight:
Assessing the weak import situation is complicated by last year’s contract dispute and work slowdowns at West Coast, according to the NRF.
But, while import cargo volume at major U.S. ports will likely be down throughout this summer, that should rise in time for the coming holiday season, the NRF said.
High inventories were an issue during the holidays this past season, and the NRF early this year noted they would continue to be so into this year. The ratio of inventories to sales were 1.48 in October, the last month for which figures were available, according to the U.S. Census Bureau, the highest since June 2009.
Warm winter weather took a toll in the early part of the year, forcing high inventories and heavy discounts of cold-weather apparel and gear. By the new year, losses topped $500 million, according to weather-planning firm Planalytics, and the issue has cropped up in several retail earnings reports in the past few months.
“Our port models are projecting weak imports in volume terms, not to be confused with the dollar value,” Hackett Associates founder Ben Hackett said in a statement. “Inventories remain very high, pointing to an overstocked situation that will depress the volume of imports in the coming peak season. Unless inventories drop through further increased consumer spending, import growth will remain sparse.”
