If one thing about last month’s reporting on the state of U.S. imports remains true, it’s that the supply chain disruption caused by the global spread of the novel coronavirus disease COVID-19 is absolutely having a bigger impact on U.S. imports than originally anticipated, and the effects will likely be seen for much longer.
As recently as last month — prior to the enactment of sweeping stay-at-home orders in much of the country — the National Retail Federation (NRF) and Hackett Associates’ Global Port Tracker showed confidence in a potential 9.3% upswing for imports in May as factories in Asia come back online following the shutdown that started a ripple through the shipping channels in January and February. Sadly, the declines at U.S. ports have been far larger than expected leading to revised forecasts that paint a disappointing picture for the months ahead.
“Even as factories in China have begun to get back to work, we are seeing far fewer imports coming into the U.S. than previously expected,” says NRF Vice President for Supply Chain and Customs Policy Jonathan Gold. “Many stores are closed, and consumer demand has been impacted with millions of Americans out of work. However, there are still many essential items that are badly needed and because of store closures cargo may sit longer than usual and cause other supply chain impacts.”
March estimates point to a 21.3% drop for the month — a five-year low — with NRF’s latest forecast estimating double-digit import declines through the summer. Current estimates show a 17.6% decline for April, followed by a 20.1% drop in May, a 21.4% decline in June, an 18.2% slide in July, and a 12.5% decrease in August.
“The COVID-19 pandemic is unraveling the economy nationally and globally as most of the world moves toward a lockdown that entails the closure of significant portions of both the service and manufacturing industries,” says Hackett Associates Founder Ben Hackett. “The largest drop is forecast for the first half of this year but with uncertainty about the length of the lockdown and extent of the pandemic, the second half may not be in better shape.”
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