Economic expansion putting pressure on logistics supply chain

Cargo imports at the nation’s largest retail container ports should hit another record in August as retailers shift from the back-to-school season to the peak shipping season for holiday merchandise.

Strong consumer demand, however, has outpaced supply chain operations since late last year and could remain a challenge as the holidays approach, warned Jonathan Gold, VP, supply chain and customs policy, National Retail Federation, in the latest monthly Global Port Tracker report released by the NRF and Hackett Associates. “The continuing lack of labor, equipment and capacity has highlighted systemic issues and the need to create a truly 21st century supply chain to ensure resiliency against the next major disruption.”

The strain of the continuing economic expansion is putting considerable pressure on the logistics supply chain, added Hackett Associates founder Ben Hackett.

“We’re seeing a lack of shipping capacity combined with port congestion as vessels line up to discharge goods from both Asia and Europe,” he said.  “Delays are stretching to landside as port terminals struggle with space shortages, and labor challenges are affecting ports, railroads and trucking companies alike.”

The U.S. ports covered by Global Port Tracker handled 2.15 million Twenty-Foot Equivalent Units in June, the latest month for which final numbers are available. That was down 7.8% from May but up 33.7% from a year earlier, when many stores were closed because of the pandemic. (A TEU is one 20-foot container or its equivalent.)

Ports have not reported July numbers yet, but Global Port Tracker projected the month at 2.22 million TEU, which would be up 15.7% from the same time last year.

August is forecast at 2.37 million TEU, which would be up 12.6% year-over-year and top May’s 2.33 million TEU for the largest number of containers imported during a single month since NRF began tracking imports in 2002. 

August is the beginning of the “peak season” when retailers stock up on holiday merchandise each year. Many retailers are moving up their shipments this year as part of their risk mitigation strategies to ensure that sufficient inventory will be available during the holidays.

September is forecast at 2.21 million TEU, up 4.9% year-over-year; October at 2.15 million TEU, down 3% for the first year-over-year decline since July 2020; November at 2.07 million TEU, down 1.5%, and December at 2.02 million TEU, down 4.1%. 

The first half of 2021 totaled 12.8 million TEU, up 35.6% from the same period last year. For the full year, 2021 is on track to total 25.9 million TEU, up 17.5% over 2020 and a new annual record topping last year’s 22 million. Cargo imports during 2020 were up 1.9% over 2019 despite the pandemic.

Global Port Tracker, which is produced for NRF by Hackett Associates, provides historical data and forecasts for the U.S. ports of Los Angeles/Long Beach, Oakland, Seattle and Tacoma on the West Coast; New York/New Jersey, Port of Virginia, Charleston, Savannah, Port Everglades, Miami and Jacksonville on the East Coast, and Houston on the Gulf Coast.