CREDIT: JOC.COM
Bill Mongelluzzo, Senior Editor | Feb 08, 2021 4:58PM EST
Buoyed by relentless growth in consumer purchasing, US retailers are projecting that imports in the first half of 2021 will increase 22.1 percent over the same period last year and, more importantly, that each month will set a new record for import volumes for those months.
These forecasts send a message to ports, carriers, terminal operators, railroads, truckers, and equipment providers who are struggling to handle today’s volumes that they will have to improve productivity in order to handle the import volumes that are expected in the coming months. In the last six months of 2020, total US imports from Asia jumped 14.5 percent compared with the second half of 2019, led by a 22.5 percent increase in volume handled by the ports of Los Angeles and Long Beach, according to PIERS, a sister product of IHS Markit within JOC.com
“It is impressive that the cargo volumes handled by the ports remain as high as they are despite congestion at the docks and the spread of the coronavirus among workers in the supply chain,” Ben Hackett, founder of Hackett Associates, said in the February Global Port Tracker report, published monthly by the National Retail Federation (NRF) and Hackett Associates.
Consumer purchasing has increased steadily since last summer when the US economy began to rebound from the economic lockdowns implemented during the first wave of the coronavirus disease 2019 (COVID-19). Total online and in-store holiday retail sales increased 8.3 percent in November and December over 2019 holiday sales, according to the NRF.
“Regardless of whether it’s in store or on retailers’ websites, the record holiday season and numbers for 2020 show consumers are buying again and have been for awhile,” said Jonathan Gold, NRF’s vice president for supply chain and customs policy. “This surge has been going on for months, and retailers are importing merchandise faster than ever.”
US imports each month from January through June are projected to increase by double-digit percentages compared with the same months last year. That’s in large part because US imports from Asia declined 10.7 percent in the first half of 2020 from the same period in 2019, according to PIERS, so year-over-year import volumes this year will be compared with an unusually weak first half of 2020.
US imports from Asia in the second half of 2020 were up 16.9 percent from the second half of 2019; imports for the calendar year ended up 4.1 percent higher. That means year-over-year monthly increases in the second half of 2021 will likely not be as strong as they were in the second half of 2020.
Global Port Tracker projects that imports will increase 14.6 percent in January, 26.3 percent in February, 41 percent in March, 13.3 percent in April, 23.8 percent in May, and 18.2 percent in June from the same months last year.
However, with monthly import volumes in this year’s first half projected to set new historical records, ports and supply chains will have to gear up immediately for steadily increasing volumes. Unlike in past years, when imports from Asia dropped steeply in February and early March because of factory closings during the Lunar New Year holidays in Asia, little relief is anticipated during the holidays this year.
“The import numbers we’re seeing reflect retailers’ expectations for consumer demand to the point that many factories in Asia that normally close for Chinese New Year this month are remaining open to keep up,” Gold said.
Contact Bill Mongelluzzo at bill.mongelluzzo@ihsmarkit.com and follow him on Twitter: @billmongelluzzo.