Key Takeaways
- Cargo coming into the country is expected to hit the highest level in two years in June, according to National Retail Federation data.
- The elevated import levels could be a good sign for the economy, which seems to be shrugging off supply chain concerns.
- Record incoming shipments indicate retailers expect consumer spending to continue at a high level for the rest of the year.
Monthly cargo imports are expected to hit their highest levels in two years, showing that supply chains appear strong as retailers prepare to boost sales.
The Global Port Tracker, a supply chain measurement from the National Retail Federation (NRF) and Hackett Associates, showed that port cargo volume in the U.S. was more than 13% higher in April than in the year-earlier month. In May, volume is estimated to have risen 8% from a year ago to its highest monthly total since August 2022
Moreover, cargo volumes are expected to continue to grow throughout the summer, with June’s totals expected to be higher by 15% year-over-year.
“The high level of imports expected over the next several months is an encouraging sign that retailers are confident in strong sales throughout the remainder of the year,” said Jonathan Gold, NRF vice president for supply chain and customs policy.
There have been some fears that supply chains could be tightening due to outside factors, with economists at Wells Fargo noting that worries over the collapse of the Francis Scott Key Bridge in Baltimore have elevated these concerns, along with attacks on shipping in the Red Sea.
Retailers Anticipate Continued Strong Consumer Spending
One reason the shipments keep coming is that retailers anticipate continued strong sales, with the NRF forecasting growth of between 2.5% and 3.5% in 2024.
Another is the “peak season” for shopping is getting stretched out, as consumer spending trends are forcing retailers to keep more items in stock, said Hackett Associates Founder Ben Hackett.
“Reasons range from retailers restocking following strong sales after the pandemic to trying to get ahead of increased tariffs on goods from China set to take effect in August and ensuring sufficient inventories for the holiday season amid strong consumer demand,” Hackett said.
This could be a good sign for the broader economy as consumer spending has seemingly lagged as of late. Shoppers have buoyed the economy during the recovery from the pandemic-related economic slowdown in 2020 but recent data showed the trend could be reversing. Retailers stocking up could be a sign that retailers do not foresee a sustained slowdown in consumer spending, and in turn, the broader economy.