According to the Global Port Tracker report released last week, cargo volume at major U.S. container ports will peak this month, the highest since last fall. This surge is attributed to retailers stocking up for the winter holidays.
Earlier supply chain threats due to labor negotiations at ports and package-delivery sectors have been addressed. “Retailers are gearing up for the crucial holiday season. Despite potential supply challenges, holiday goods are steadily entering the country, ensuring a smooth shipping season,” commented Jonathan Gold, NRF Vice President for Supply Chain and Customs Policy.
Several labor disputes have been tentatively resolved, including a 13-day port strike in western Canada and potential strikes at West Coast ports and United Parcel Service. While the Canadian labor agreement has been ratified, others are still in the ratification process.
Ben Hackett, the founder of Hackett Associates, highlighted a discrepancy. Despite increased consumer spending and employment, cargo volume has seen double-digit year-over-year declines. He explained, “The discrepancy between rising growth in sales and declining cargo volumes is happening because retailers are working their way through inventory built up over the last 12 to 18 months. Cargo growth should resume as inventories deplete.”
June’s data showed U.S. ports handled 1.83 million Twenty-Foot Equivalent Units (TEU), a decline from the previous year. The first half of 2023 recorded 10.5 million TEU, a 22% drop from 2022’s first half. However, August is expected to hit 2.03 million TEU, the first time since October that numbers have reached 2 million. Projections for the remaining months of 2023 indicate fluctuations, but the total for the year is estimated at 22.3 million TEU, a 12.8% decrease from 2022.