Record retail sales and continued inventory restocking provide the backdrop for the National Retail Federation’s increased expectations for inbound containers. On Monday, the group raised its forecast for first-half 2021 twenty-foot equivalent units (TEUs) landing at major container ports in the U.S. to 23.3% year-over-year.
Final January numbers showed TEUs came in 13% higher year-over-year at 2.06 million, the busiest January in the dataset’s nearly 20-year history.
“NRF is forecasting what could turn out to be record retail sales growth in 2021, and retailers are importing huge amounts of merchandise to meet the demand,” said Jonathan Gold, NRF’s VP of supply chain and customs policy. “The supply chain slowdown we usually see after the holiday season never really happened this winter, and imports are already starting to grow again.”
January imports came in better than normal seasonality, down only 2.3% from December.
Robust holiday sales continued into January. Census Bureau data for the month showed retail sales on a seasonally adjusted basis increased 5.3% from December and were up 7.4% year-over-year. Further, recent financial reports from retailers showed sales growth once again outpaced inventory additions in the fiscal fourth quarter ended January, an indication that merchandise will continue to be added at a fast pace throughout at least the first half of the year.
The NRF forecasts for February (+24.4%) and March (+44.1%) are quite high but reflective of easier comps created by the early days of the pandemic when freight volumes plummeted. February is normally the slowest month of the year as it encompasses the bulk of Chinese New Year. However, the year-ago comp also has the additional noise of widespread factory closures in Asia as the virus spread in early 2020.
The monthly forecasts average more than 20% from April to June, moderating to up 5.3% year-over-year in July. The group’s new January to June prediction came in higher than its previous jaw-dropping outlook of 22.1%.
The monthly predictions are developed in conjunction with consulting firm Hackett Associates.
“Consumers haven’t let the pandemic stop them from shopping, and retailers are making sure their customers can find what they want and find it safely,” Gold added.
Previous NRF forecasts call for retail sales, excluding auto dealers, gas stations and restaurants, to grow between 6.5% and 8.2% during 2021.
A strong consumer, more stimulus on the way and depleted stock levels bode well for intermodal traffic on the railroads as well as trucking demand. Data shows that both the rails and trucking companies have already shaken off February’s two-week weather-induced slowdown, which closed most land-based transportation networks for days at a time.
2020 imports increased 1.9% year-over-year to 22 million TEUs, edging out the prior record set in 2018, according to the NRF.
An increase in vaccinations potentially presents a double-edged sword for retail demand. While good for the overall economic recovery, consumer spending will shift from hard goods to services as the inoculation rate climbs. However, hard-hit retail softlines like apparel, which recorded a 16.4% year-over-year decline in imports last year, could see a resurgence, offsetting some of the transition in spending as consumers begin to add to their wardrobes after taking a year off.
“As COVID-19 ravaged the economy in 2020, it seemed as if any hope of recovery was distant,” said Ben Hackett, founder of Hackett Associates. “Then came the rollout of vaccines that appear to be highly effective and are bringing strong signs of a quick recovery. The successful distribution of vaccines will help ensure that the economic recovery will likely be strong and sustainable.”
3/9/21 I seen
No Third Party Repairs! Sign is in front of the Pilot Garage in Hagerstown maryland i-81 exit 5B. Does that mean rail containers or rental trucks?