Blog Post #7 – US Imports In Early 2023 And Beyond

April 24, 2023

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The import and export market is still uncertain, all over the world.  As you’ve probably heard 1.2 billion (or more) times over the last 3 years and change, the COVID pandemic has absolutely wreaked havoc on the world’s supply chain.  While the future of US imports is still definitely in flux, there have been some slight signs of improvement.  The US import market in March of 2023 has improved over February of this year.  While it is still down from March 2022,  it’s even up from March of 2019, obviously well-before the pandemic started.  However, its not all an improvement.  East Coast ports such as Savannah, New York, New Jersey, and Charleston are all down single-digit percentages.  The improvements for March 2023 are mostly seen on the West Coast, with the ports of Los Angeles and Long Beach, California seeing the largest improvements, with 30% and 25% more imports than February 2023, respectively.  This can also be explained by the disruptions the California ports went through during Lunar New Year, which typically takes place in February. 


However, Chinese imports to the US as a whole are still down.  The overall improvement to imports to the US in March was mainly caused by importing from Thailand, South Korea, and Japan.  The National Retail Federation anticipates imports to the US to steadily increase over the coming months, however not to anywhere close as those seen during the pandemic.  These numbers are more akin to import number seen before COVID.  Companies will have to be vigilant and thorough to avoid adding on any unnecessary challenges in addition to the ones the uncertain supply chain market provides. 


Wholesale inventory rates are still much higher than normal.  For example, in the wholesale apparel industry, inventory was over 3 times sales.  This was 46% higher than the rate in the industry in February 2019.  To a lesser, but still worrying extent, inventory for wholesale plumbing and heating equipment was over 2 times sales, and for household appliances, inventory was 1.37 times sales.  This hurts the supply chain for a few reasons. Firstly, the companies involved are sitting on tons of unsold product, much more than they are used to. This means that warehouse space is extremely limited. It also means that the products will slowly start to diminish in value, or succumb to wear and tear from sitting in a box in a facility for such extended periods of time.


Like anything in life, these changes do not come without their own risks.  Due to the aforementioned factors, the surplus of inventory companies have built up may take longer to recede than top analysts originally thought.  Certain organizations such as the Global Supply Chain Pressure Index, and methodologies have declared somewhat of a return to normalcy for the supply chain, although these are under scrutiny by others.  Either way, things seem to be leveling out, even if they aren’t 100% back to pre-pandemic levels.  Just don’t expect all those fast food companies to fill out their menus to what they once were.  Yet. 

Jack

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