Imports at major US container ports are expected to see a sharper-than-usual drop this month due to the coronavirus causing longer Lunar New Year shutdowns of factories in China.
US retailers were already beginning to shift some sourcing to other countries because of the trade war, but if shutdowns continue, there could be an impact on supply chains.
IMPORTS at major US container ports are expected to see a sharper-than-usual drop this month due to the coronavirus causing longer Lunar New Year shutdowns of factories in China, according to a report by the National Retail Federation and industry consultant Hackett Associates.
February is historically a slow month for imports because of Lunar New Year and the lull between retailers' holiday season and summer, but this is an unusual situation," said Jonathan Gold NRF vice president for supply chain and customs policy.
He said many Chinese factories have already stayed closed longer than usual, and "we don't know" how soon they will reopen.
He said US retailers were already beginning to shift some sourcing to other countries because of the trade war, but if shutdowns continue, we could see "an impact on supply chains".
Ben Hackett, founder of Hackett Associates, said that projecting container volume for the next year has become even more challenging with the outbreak of the coronavirus in China and its spread.
"It's questionable how soon manufacturing will return to normal, and following the extension of the Lunar New Year break all eyes are on what further decisions China will make to control the outbreak," Mr Hackett said.
The NRF and Hackett Associates produce the Global Port Tracker report which covers container throughput at major ports in the US.
The February report said US ports saw 1.72m teu in December, citing the latest figures available.
That figure was up 1.8% from November but down 12.4% from the unusually high numbers at the end of 2018 as shippers frontloaded cargo ahead of a scheduled tariff increase.
Including the December figures, 2019 saw throughput of 21.6m teu, which represents a slight decrease of 0.8% from 2018 amid the continuing trade war – but still the second-highest year on record.
Imports during 2018 hit a record of 21.8m teu, partly due to frontloading ahead of anticipated 2019 tariffs.
January 2020 was estimated at 1.82m teu, down 3.8% from January 2019.
The report has issued a revised forecast for February, saying it will drop by 12.9% year-over-year at 1.41m teu, while March is expected to drop 9.5% year-over-year at 1.46m teu. Before the coronavirus outbreak, Global Port Tracker had forecast February at 1.54m teu and March at 1.7m teu.
April is currently forecast at 1.82m teu, up 4.5% year-over-year; May at 2m teu, up 8.3%, and June at 1.95m, up 8.5%. But those figures also could be revised as the duration of the coronavirus impact remains unknown.
As currently projected, those numbers would bring the first half of 2020 to 10.47m, down a modest 0.4% year-over-year.