US Retailers Accelerate Holiday Imports Amid Concerns Over Strikes and Disruptions, Reports Reuters

By Siddharth Cavale and Lisa Baertlein

NEW YORK – Retailers are ramping up imports to the United States this summer, anticipating potential strikes by port workers and continuing shipping disruptions caused by recent incidents in the Red Sea, all while preparing for a condensed holiday shopping season.

In July, container imports and freight rates soared, indicating an earlier-than-usual peak season for an ocean shipping industry that manages around 80% of global trade. Analysts anticipate that July will be a peak month for U.S. retailers, who comprise nearly half of that trade, with August expected to be similarly strong.

To attract early shoppers, companies dealing in toys, home goods, and consumer electronics have advanced their holiday promotions. "Retailers don’t want to be caught off guard," noted Jonathan Gold, vice president for supply chain and customs policy at the National Retail Federation (NRF).

Many importers have expedited their holiday orders, with some even shipping Christmas items as early as May, according to Peter Sand, chief analyst at a pricing platform. This surge in imports is primarily a precaution against a potential port strike and the late date of Thanksgiving, which this year falls on November 28, impacting peak shopping and delivery times leading up to Christmas.

July marked the third-highest monthly volume for U.S. container imports, with 2.6 million 20-foot equivalent units (TEUs) recorded, representing a 16.8% increase from the previous year, driven partly by record imports from China, as reported by a supply chain software provider.

The NRF, which includes leaders from major retail corporations, expects continued strong imports in August. Walmart, the largest importer of containers in the U.S., is set to release its second-quarter earnings on August 15.

Concerns loom over a possible strike on October 1 at multiple U.S. seaports, following stalled negotiations between the International Longshoremen’s Association and the United States Maritime Alliance.

Maersk recently detailed the potential fallout from any strikes at U.S. ports, warning that even a brief work stoppage could lead to significant delays and backlogs lasting several weeks.

Since late April, non-contract spot rates for shipping containers from the Far East to the U.S. West Coast surged by 144%, though they have since decreased by 17%. Similar trends have been noted on routes to the U.S. East Coast and other international destinations.

"We should expect further declines in the spot market, though the decrease may not be as sharp as the previous increase, leading to a difficult end of the year for shippers," Sand explained.

TARIFF THREAT

The growth in U.S. container imports during the first half of 2024 has been significantly influenced by looming tariffs on exports from China and other nations. The Biden administration has implemented new tariffs on various goods, which are set to take effect later this year.

"Significant tariff impacts will be seen in sectors like electric vehicle batteries and solar cells," said Jason Miller, a professor of supply chain management.

Biden has upheld tariffs established by the Trump administration, which pose a threat of even larger tariffs if Trump, the Republican nominee for the 2024 election, regains the presidency. So far, Miller noted, the response from companies has been relatively muted.

Maersk indicated that uncertainty surrounding tariffs may drive companies to accelerate demand ahead of the upcoming U.S. elections.

"There is a consensus that the U.S. and China are in a more competitive dynamic now, and this situation is unlikely to change regardless of which political party wins the presidency," stated Maersk CEO Vincent Clerc this week.