The impact of the coronavirus on business in China, which currently is exacerbating the annual effects of the Lunar New Year, is hitting major retail container ports in the U.S., according to the Global Port Tracker report released by the National Retail Federation and Hackett Associates.
According to Jonathan Gold, NRF vp/supply chain and customs policy, “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. Many Chinese factories have already stayed closed longer than usual, and we don’t know how soon they will reopen. U.S. 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.”
U.S. ports covered by Global Port Tracker handled 1.72 million Twenty-Foot Equivalent Units in December, up 1.8% from November but down 12.4% from unusually high numbers at the end of 2018 ahead of a scheduled but ultimately postponed tariff increase. December numbers brought the 2019 total to 21.6 million TEU, a 0.8% decrease from 2018 amid the ongoing trade war but still the second-highest year on record. Imports in 2018 hit a record of 21.8 million TEU, partly due to tariff-related frontloading.
In January, ports handled an estimated at 1.82 million TEU, down 3.8% from January 2019. The February forecast calls for movement down 12.9% year-over-year to 1.41 million TEU, with the March forecast down 9.5% year-over-year to 1.46 million TEU. Before the coronavirus outbreak, Global Port Tracker forecast February at 1.54 million TEU and March at 1.7 million TEU.
“Projecting container volume for the next year has become even more challenging with the outbreak of the coronavirus in China and its spread,” said Ben Hackett, Hackett Associates founder. “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.”