Global News US retailers upgrade H1 import forecast despite global shipping disruptions

US retailers on Friday sharply upgraded their expectations for US imports through the first half of 2024 in yet another sign that disruptions to commercial shipping in the Red Sea and Panama Canal are not crimping international supply chains.

Global Port Tracker (GPT), published monthly by the National Retail Federation (NRF) and Hackett Associates, indicated in its newly published March report that US imports for the first six months of the year will be up 7.8% compared to the first half of 2023. That’s an upward revision from the forecast of 5.3% H1 growth in February’s GPT.

It’s also the second month in a row that retailers have raised their forecast for import growth during the first half of 2024.

“Retailers continue to work with their partners to mitigate the impact of disruptions from the Red Sea and Panama Canal disruptions,” Jonathan Gold, NRF’s vice president for supply chain and customs policy, said in Friday’s report.

Most of the container ships in the Asia to the US East Coast trade that were passing through the Suez Canal have been rerouted around the southern tip of Africa since the Houthi militant attacks in the Red Sea began in mid-November, increasing transit time and costs to shipments. There is no end in sight for the attacks, which took on new urgency this week after three crew members on a dry bulk vessel in the Red Sea were killed, the first fatalities reported since the hostilities began.

“It’s very clear it’s getting worse,” Lars Jensen, CEO of the consulting firm Vespucci Maritime, told the Journal of Commerce’s TPM24 conference Wednesday in Long Beach. Still, Jensen said the situation in the Red Sea is “a challenge, not a crisis” for commercial shipping.

The March GPT on Friday upgraded its year-over-year forecast for US imports for every month through June. Imports in March are now forecasted to increase 8.8% compared to the 5.5% growth expected in last month’s report. Imports in April are expected to rise 3.1%, up from the previous forecast of 2.6%. Slighter upgrades were forecast for May (0.5% from 0.3%) and June (5.7% from 5.5%).

It’s important to note that year-on-year comparisons with imports in the first half of 2023 will be particularly favorable because H1 imports last year fell sharply from the record pandemic-driven volumes of 2021 and 2022.

US imports have risen month-on-month in both December and January, with imports from Asia at 1.54 million in TEUs in January, up 16% year on year, according to PIERS, a sister product of the Journal of Commerce within S&P Global.

Confidence showing for H2 imports GPT also issued its first forecast for July, projecting that imports will increase 3.8% from July 2023. Retailers and industry analysts have acknowledged that forecasting import volumes for the second half of the year is tricky given unknowns in the global economy and geopolitical uncertainty, so the forecast for growth in July as H2 kicks off shows confidence that consumer demand may remain strong.

“Fear of an inflationary impact due to the raised cost of transportation should be alleviated by now,” Ben Hackett, founder of Hackett Associates, said in Friday’s GPT. “Retailers and their carrier partners are adjusting to the reroutings and new schedules, which add new costs, but those can be partially offset by not having to sail up the Red Sea and not having to pay the Suez Canal transit costs.”