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Import cargo in winter lull; Red Sea attacks most likely to affect East Coast ports

A deal between unions and employers at West Coast ports comes as the retail industry is entering the peak shipping season.
Retailers are seeing longer transit times and increased costs as a result of the attacks in the Red Sea.

With the holiday season over, inbound cargo volume at the nation’s major container ports should gradually slow during the first quarter of 2024 before beginning to build again in the spring. 

The slowdown comes as disruptions caused by attacks on cargo ships in the Red Sea have once again created volatility in retail supply chains, according to the Global Port Tracker report by the National Retail Federation and Hackett Associates.

“This is the traditional slowdown when the supply chain gets a break after the busy holiday season, but there’s always a new challenge on the horizon,” said NRF VP for supply chain and customs Policy Jonathan Gold said. “Retailers are working with their carrier partners on mitigation strategies to limit the impact, but we are seeing longer transit times and increased costs as a result.”

Hackett Associates founder Ben Hackett said any effect from the Red Sea attacks would most likely come at East Coast ports. Most cargo headed to the East Coast from Asia comes across the Pacific and through the Panama Canal. But some comes through the Red Sea before crossing the Atlantic, and carriers’ decision to go around the Cape of Good Hope to avoid the attacks is adding five or six days to the month-long trip from Shanghai to Savannah via the Suez Canal. And some retailers are reporting delays of as long as two weeks.

“The number of containers arriving at East Coast ports should not be directly affected if carriers add ships to maintain capacity, but shippers will have to adjust their supply chains to cope with longer transit times,” Hackett said. “We may see an increase of Asian cargo arriving at West Coast ports and then shipped east via intermodal rail, but doing so is costly and does not save that much time. As might be expected, carriers are passing on the additional voyage costs and then some.”

U.S. ports covered by Global Port Tracker handled 1.89 million twenty-foot equivalent units – one 20-foot container or its equivalent – in November, the latest month for which final numbers are available. That was down 8% from 2.06 million TEU in October, which was the busiest month of the year and the peak of the fall shipping season, but up 6.6% from November 2022.

Ports have not yet reported December numbers, but Global Port Tracker projected the month at 1.89 million TEU, up 9% year over year. That would bring 2023 to 22.3 million TEU, down 12.8% from 2022. Imports during 2022 totaled 25.5 million TEU, down 1.3% from the annual record of 25.8 million TEU set in 2021.

Volume is expected to rise to 1.92 million TEU in January, a year-over-year increase of 6.1%, before slowing for the remainder of the quarter. February is forecast at 1.76 million TEU, up 13.8% year over year, and March is forecast at 1.7 million TEU, up 4.7% from last year.

February is traditionally the slowest month because of Lunar New Year factory shutdowns in Asia but the timing of the holiday and its impact on cargo varies. April is forecast at 1.79 million TEU, up 0.2% year over year, and May at 1.92 million, down 0.8% from last year.

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.  

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