Port Tracker report continues to highlight impact of coronavirus on U.S.-bound imports

Given how the coronavirus continues to spread, the subsequent impact on global shipping operations is expected to be longer, larger, and more lasting than was first thought, coupled with factory shutdowns and travel restrictions in China affecting production according to the most recent edition of the Port Tracker report issued today by the National Retail Federation (NRF) and maritime consultancy Hackett Associates.

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.

As noted in the previous edition of Port Tracker, coronavirus continues to raise myriad concerns for global shipping, which were outlined by NRF Vice President for Supply Chain and Customs Policy Jonathan Gold.

“There are still a lot of unknowns to fully determine the impact of the coronavirus on the supply chain,” Gold said. “As factories in China continue to come back online, products are now flowing again. But there are still issues affecting cargo movement, including the availability of truck drivers to move cargo to Chinese ports. 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, January saw 1.82 million TEU (Twenty-Foot Equivalents) handled, which represents the most recent month for which data is available. This marked a 5.7% increase over December and a 3.8% decline compared to what the report called “unusually high numbers” a year ago at the same time, due to tariffs levied by the U.S. on goods originating out of China.

February was pegged at 1.42 million TEU, topping January’s 1.41 million TEU and off 12.6% annually and also below the 1.54 million TEU recorded prior to the coronavirus starting to have a negligible impact on imports. March is expected to come in at 1.32 million TEU, which is down 18.3% annually and below the 1.46 million TEU originally expected for February, as well as the 1.7 million TEU that was expected prior to the coronavirus taking effect. April is forecasted to hit 1.68 million TEU, which represents a 3.5% annual decline and also below the 1.82 million TEU initially expected for March.

Even with the challenges related to forecasting, due to coronavirus, the report said that May—at 2.02 million TEU—would mark a 9.3% annual gain, with the caveat that this would mean Chinese factories, by then, will have resumed production and endeavoring to catch up from previously lower volumes. For the first half of 2020, the report said today volume—at 10.23 million TEU—would be down 2.8% annually and less than the initial estimate of 10.47 million TEU.

“Now that we are in the coronavirus environment, uncertainty has expanded exponentially,” Hackett Associates Founder Ben Hackett wrote in the report. “Our projections are based on the optimistic view that by the end of March or early April some sort of normalcy will have returned to trade.” 

Hackett added in the report that first quarter trade has slumped dramatically, as evidenced by the World Bank having lowered its 2020 GDP projection from 2.9 to 2.4, with the potential to go down another 1%.

“The largest global economies have taken heed and are looking for economic measures to counter the downturn,” wrote Hackett. “A mix of interest rate cuts and monetary injections to boost economic production have already been announced. A meeting of the G7 was assembled to coordinate reactions. The question is whether any of this can help boost trade and consumption when large numbers of consumers and workers are in quarantine and not in a position to take advantage of these measures. Tourism is badly impacted, and only Wall Street – which has been up one day and down the next – appears to benefit from the policy statements.”