US imports of goods used in the retail industry fell to their lowest level in five years in March, signaling that the slowdown in consumer spending will likely extend to the second half of the year.
“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,” said Ben Hackett in the National Retail Federation (NRF) and Hackett Associates’ Global Port Tracker report. “The largest drop is forecast for the first half of this year, but with uncertainty about the length of the lockdown and extent of the pandemic, the second half may not be in better shape.”
Imports at the US’s major retail container ports are estimated to reach 1.27 million 20-foot equivalent units (TEU) in March, down 21% from the previous year. The estimate is the lowest level imports have reached in five years, when a labor dispute caused slowdowns at West Coast ports, NRF noted. Before the virus outbreak, NRF’s Global Port Tracker had predicted March imports would reach 1.7 million TEU.
Global Port Tracker expects imports to decline 18% year on year to 1.44 million TEU in April, and by 20% in May. Prior to the coronavirus, imports for the February to May period had been forecast at 6.9 million TEU, but are now expected to fall 17% to 5.7 million TEU. Similar declines are expected in June and July, with a more modest drop of 13% projected for August, the NRF said.
The declines come even as factories in China have started to get back to work, noted Jonathan Gold, vice president for supply chain and customs policy for the NRF.
“Many stores are closed, and consumer demand has been impacted with millions of Americans out of work,” he observed. “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.”
Image: Shipping containers at a port. (Shutterstock)